Société Générale expects results to recover in 2010 with lower bad risk write-downs after it rattled markets last month with a toxic asset warning.
France's second-biggest listed bank has had to trim back much of its previously-booming investment banking activities after taking bigger hits than many of its rivals from the global credit crisis.
The company today reported fourth-quarter net profits of €221m, up from €87m a year earlier and ahead of a consensus forecast of €150m. However, the figure was below its third-quarter net profit of €426m. It also cut its dividend to €0.29 from €1.20.
In January, Société Générale said it was expecting only a 'slight profit' for the fourth quarter after taking a new €1.4 billion hit on risky assets.
The group, which suffered a €4.9 billion rogue trading scandal in 2008, has been weighed down by its exposure to toxic assets such as collateral debt obligations although it expected fewer writedowns this year compared with 2009.
'2010 is likely to be marked by a sharp rebound in the group's financial results due notably to the gradual elimination of the impact of the financial crisis,' SocGen said.
It also expects better results at its domestic and overseas retail banking divisions.
The bank's fourth-quarter net profit was a fraction of the €1.37 billion reported for the same quarter by BNP Paribas, France's biggest listed bank, yesterday.
It also paled in comparison to Deutsche Bank's fourth-quarter net profit of €1.3 billion and profits of $3.3 billion and nearly $5 billion at Wall Street banks JP Morgan and Goldman Sachs respectively.
Meanwhile, the French banking group said it had agreed with its Russian partner Interros to combine Rosbank and SocGen's other Russian units into a new single entity which would be 81.5% owned by SocGen.
The new unit would employ 30,000 people and become Russia's fifth-biggest bank by the size of credit portfolio.
Like many banks around the world, France's lenders have come under political pressure to make moderate bonus payments. France has also joined Britain in imposing a tax on trader bonuses.
It said today that it has set aside €250m for its 2009 traders bonuses - less than the €500m set aside by BNP Paribas.
