Société Générale recorded its best first-half performance in 5 years | World Weekly
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Société Générale continued its recovery from sharp trading losses last year, posting its best first-half performance in five years on Thursday morning.
The Paris-based bank, which was hit by the collapse of its equity derivatives products last spring as companies canceled dividend payments during the first wave of the pandemic, said it generated 1.4 billion euros in net income for the second quarter of 2021.
This was higher than the 1.3 billion euro loss in the same period last year and 68 percent higher than analysts had expected.
SocGen’s net banking income rose 18 percent to €6.3 billion, reflecting strong performance across its business lines.
Frederic O’Dea, CEO, said the bank had anticipated customer needs and had taken measures to “improve the group’s operational efficiency and maintain the excellent strength of the loan portfolio and risk management”.
The strong results come after a period of turmoil in SocGen. The bank was one of the worst performers in stress tests in Europe, which was announced last week.
Regulators used a scenario of a 3.6 per cent fall in EU GDP and 12.1 per cent unemployment to test the performance of banks’ balance sheets.
Under the scenario, which was severely affected by the impact of the pandemic, Societe General Motors’ ratio of common stocks to risk-weighted assets fell from 13.16 percent to 7.54 percent, well below the sector average of just over 10 percent.
SocGen agreed to sell Lyxor, its money management arm, in June to French investment group Amundi in a cash deal worth €825 million.
The deal excludes about €16 billion of Lyxor’s assets under management in areas such as structured products, which will be held by SocGen.
The bank said it expects to realize a capital gain of around 430 million euros once the deal is completed.