Societe Generale SA said yesterday its net profit fell by half in the second quarter as the French bank took higher writedowns on its exposure to exotic securities and greater financial liabilities.
France’s second-largest bank reported net profit of 309 million euros (US$445 million) for the three months ended June 30, down from 644 million euros a year earlier.
The Paris-based bank’s earnings were hit by non-recurring losses of 1.7 billion euros, which included new writedowns on the value of credit default swaps as well as the bank’s financial liabilities.
The bank took a total of 3.6 billion euros in writedowns for non-recurring items in the first half, leaving its net profit for the six months ended June 30 at 31 million euros, compared with 1.74 billion euros in the same period a year earlier.
Operating profit fell by more than half in the second quarter to 534 million euros, while revenue rose 2.4 percent to 5.72 billion euros, the bank said.
In a statement, Societe Generale Chairman Frederic Oudea said the bank “is focusing on consolidating its market share, controlling risks and restructuring the activities most severely affected by the crisis in order to adapt to the new environment and prepare for the future.”
The results compare poorly with Societe Generale’s big domestic rival, BNP Paribas, which on Tuesday reported a quarterly profit of 1.6 billion euros.
The bank’s Tier One ratio, seen as a key measure of a bank’s financial health, improved to 9.5 percent at the end of June, up from 9.2 percent at the end of March. The improvement was partly attributable to the bank’s decision to not buy back any of its own shares during the second quarter and hold onto its capital.
Meanwhile, Lloyds Banking Group PLC, part owned by the British government after a bailout, yesterday reported a loss of £3.1 billion (US$5.3 billion) for the first half of the year as bad loans rose to a record high.
The bank expressed confidence that the worst part of the bad debt burden was over and that earnings would improve.
“With impairments anticipated to have peaked in the first half, management expects the group’s results to improve in the second half and through 2010,” chief executive Eric Daniels said.
The partly nationalized bank reported that impairments rose from £2.5 billion to £13.4 billion — 80 percent stemmed from Halifax/Bank of Scotland (HBOS), which was taken over by Lloyds TSB.
Although the merged company’s revenue was 7 percent higher at £11.9 billion, Lloyds posted a pretax loss of £3.96 billion. Pro-forma figures assume that HBOS was part of the company from Jan. 1 and excludes certain exceptional items.
“Our first-half loss was driven by the high levels of impairment. The core business delivered a resilient performance, despite the weak economy,” Daniels said.
The company said it expected weak growth in the British economy next year.
SCHEDULE: The delegation is due to meet with President Tsai Ing-wen this morning and witness the signing of an MOU on bilateral health cooperation in the afternoon US Secretary of Health and Human Services (HHS) Alex Azar yesterday arrived in Taipei aboard a US government plane at the head of a delegation that is the highest-level visit by a US official since Washington switched diplomatic recognition to China in 1979. Azar’s flight landed at Taipei International Airport (Songshan airport) at 4:48pm, nearly one hour earlier than scheduled, the Ministry of Foreign Affairs said. The apron where it landed is reserved for military aircraft, the Songshan Air Force Base Command said. The members of Azar’s delegation included HHS Assistant Secretary for Preparedness and Response Robert Kadlec, HHS Chief of Staff Brian
ALEX AZAR: The first visit by a head of the Department of Health and Human Services would strictly observe the CECC’s special regulations, the Ministry of Foreign Affairs said US Secretary of Health and Human Services (HHS) Alex Azar is to lead a delegation to Taiwan — the highest-level visit by a US Cabinet official since the two sides cut formal relations in 1979. The plan was announced yesterday morning by the US Department of Health and Human Services and confirmed by the Ministry of Foreign Affairs (MOFA). Beijing has expressed its concerns to Washington, Chinese Ministry of Foreign Affairs spokesman Wang Wenbin (汪文斌) said later yesterday. Taiwan and the US only issued statements saying that the visit would happen “in the coming days.” MOFA said that due to security concerns, it would
‘CROSS-STRAIT CONSIDERATIONS’: Groups said that the Ministry of Education’s policies excluded Chinese and students should not be blocked over political issues The Taiwan International Student Movement yesterday said it would protest today outside the Ministry of Education in Taipei against a policy that excludes some Chinese students from returning to Taiwan amid the COVID-19 pandemic. Since June 17, the ministry has allowed foreign students from 19 “low risk” and “medium-low risk” countries and regions to enter Taiwan. On July 22, it announced that it was relaxing restrictions to include students from all countries and regions who are graduating this semester and on Wednesday it further expanded entry to students enrolled in degree programs. A letter sent by the ministry on Wednesday to universities did
The military last week sent “no small number” of Marine Corps officers to the Pratas Islands (Dongsha Island, 東沙群島) following reports of a Chinese People’s Liberation Army (PLA) drill targeting the islands scheduled for this month. In an interview with Hong Kong’s Bauhinia Magazine published on Saturday last week, PLA National Defense University professor Li Daguang (李大光) confirmed that the Chinese army was planning to stage a simulated invasion of the Pratas Islands in the South China Sea this month. The islands comprise three atolls, with Pratas Island, at 1.74km2, being the largest. They lie southwest of Taiwan proper in the South