Unexpectedly modest bad debt provisions and an investment banking recovery cushioned Société Générale against steep falls in second quarter profits and the French bank said there were signs of stabler market conditions ahead.
SocGen said today that net income fell 52% from last year to €309m, well above average estimates of €97m and bouncing back from a first-quarter loss of €278m.
Bad debt provisions of €1.1 billion were below estimates of €1.3 billion and the investment banking arm's net loss of €12m compared with average forecasts for a loss of €213m.
Fighting back since falling victim to a €4.9 billion trading loss in January 2008, SocGen saw its investment bank benefit from a recovery in global financial markets, which rebounded in the second quarter from all-time lows caused by the financial crisis. The bank also won several large bond issue mandates.
The world's top banks have so far produced a mixed set of results. Earlier this week BNP Paribas, France's biggest bank by market capitalisation, posted higher second-quarter profits while UBS reported a loss.
Solid profits from the likes of BNP, HSBC and Goldman Sachs have led some to think that the worst of the financial crisis might be over.
SocGen said in a statement that while the economic outlook remained uncertain, there were signs that market conditions were becoming more stable.
SocGen has been treading the path to recovery since getting caught in the trading scandal of 19 months ago, which it blamed on unauthorised deals carried out by
Jerome Kerviel, a former junior trader at the bank.
Kerviel remains under formal investigation for breach of trust, computer abuse and falsification.
The losses caused by the Kerviel scandal reignited speculation that BNP Paribas might pounce on its weakened cross-town rival, but SocGen chief executive Frederic Oudea said today that the bank still aimed to stay independent.
