Société Générale said its net profit slumped sharply in the second quarter as the French bank continued with its efforts to meet new international banking capital requirements.
Société Générale's net profit fell to €433m in the three months to June, down 42% from €747m a year earlier.
The bank had gained notoriety as the victim of convicted fraudster Jerome Kerviel.
The bank warned today that it expects business conditions to "remain uncertain and challenging over the next few quarters."
It said profit from corporate and investment banking plummeted more than 70% in the second quarter as the bank took losses disposing of €2.2 billion in debt obligations and other risky, capital-intensive assets.
Earnings were also affected by writedowns in some of the group's international activities. It took a €200m writedown against TCW, a California-based asset management firm acquired in 2001. The bank also took a €250m writedown against its Russian retail bank unit Rosbank.
The bank's revenue slid in the second quarter, falling 3.6% to €6.3 billion. Stability in the bank's core French retail banking arm offset declines in investment banking during the quarter.
Société Générale has been strengthening its capital base in line with new international requirements on the cushion banks must keep against the risk of investments going sour.
The bank said it is on track to achieve a targeted capital ratio of over 9%, under new rules coming into force next year, by the end of 2013. The bank said it will be able to build this cushion through deleveraging and asset sales, and has pledged it would not need to raise funds through a capital increase.
