SocGen profit Q1 2019

Societe Generale's profit in the first quarter fell 26% in the first three months of the year, as difficult market conditions continued to dampen European banks.

SocGen, the third largest bank in France, posted a net profit of 631 million euros (705 million USD) for the first three months of the year. This compares to a net profit of 850 million euros a year ago and 624 million euros in the last three months of 2018.

Analysts polled by Reuters had expected a first quarter profit of about 637 million euros.

SocGen shares have increased by more than 2% in this morning's transactions.

Here are some of the takeaways:

• Net income for the first quarter came to 631 million euros, compared with 850 million euros a year ago.
• The turnover was established at 6.2 billion euros, down more than 1% from the same quarter of 2018.
• The bank's capital base ratio was 11.7% at the end of the first quarter.

"I am happy at the beginning of the year," said CNBC President Julianna Tatelbaum, Frederic Oudea, CEO of SocGen.

"I must say that the very good news concerns the capital ratio and we show that, yes, we can certainly solve this problem," said Oudea.

Its Tier 1 common equity ratio, which reflects the strength of a bank, stood at 11.7% at the end of the first quarter.

A prolonged period of low interest rates has reduced retail bank returns in recent years, pushing SocGen – as well as other major European banks – to rely on the more volatile results of retail banking. bank financing and investment, with mixed results.

Last month, the Parisian bank announced plans to cut 1,600 jobs – mainly in its corporate banking and investment activities – with the goal of increasing profitability after the poor results of the bank's activities. ;last year.

"Investors, after the fourth quarter of 2018, were rather in wait-and-see, wondering where the markets were going to go, questioning the economy, etc.," said Oudea.

"If, as we think, people are a little more comfortable with the economic outlook and the major risks, these things should potentially disappear," he added.

Revenues for the quarter were € 6.2 billion, down more than 1% from the same period last year.

The lender had previously announced that it would reduce its costs by 500 million euros within its finance and investment banking division in early February, its fourth quarter results having been affected by a sharp decline in the markets, which forced it to reduce its growth objectives of profitability and revenue.