Societe Generale q3 2020 earnings

A logo outside a Societe Generale SA bank branch in Paris, France.

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LONDON — Societe Generale beat expectations for its third-quarter earnings on Thursday on the back of more “normalised” market conditions.

The French bank reported a net income of 862 million euros ($1.011 billion) for the third quarter. Analysts had estimated a net income of 458 million euros, according to Refinitiv.

This comes after the French bank reported a net loss of 1.26 billion euros for the second quarter of the year due to Covid-related loan provisions and the reduced value of its trading business.

Here are other highlights for the quarter:

  • Revenues hit 5.8 billion euros, a 2.9% decrease from a year ago.
  • Underlying operating expenses fell 7.3% from a year ago, to 4 billion euros.
  • Cost of risk (which sheds light on its risk exposure) amounted to 40 basis points.
  • CET 1 ratio (a measure of bank solvency) hit 13.1%, vs. 12.5% in the previous quarter.

The French lender targeted a CET 1 ratio above 12% at the end of 2020, cost or risk at around 70 basis points and underlying operating expenses of around 16.5 billion euros.

“The Societe Generale Group’s Q3 results illustrate the ability of all our businesses to rebound, after the exceptional lockdown period that we have experienced, and to adapt to a still very uncertain environment,” Frederic Oudea, chief executive officer of SocGen, said in a statement.

Its two retail units delivered lower net incomes in the third quarter from a year ago. The French retail banking unit saw net income drop by 9% over the last 12 months and international retail banking fell by 34.3% from a year ago.

However, Global Banking reported an increase in net income of 50.6% from a year ago on the back of more “normalised” market conditions in comparison with the first six months of 2020.

Fixed Income and Currencies hit revenues of 569 million euros driven mainly by “healthy activity with European corporate clients, higher revenues in the Americas region and in flow and hedging activities.” The French lender also saw a “sharp rebound” in equity activities.

Shares of Societe Generale are down about 58% year-to-date.

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