France's Société Générale has posted a drop in equity and fixed-income trading revenues in the fourth quarter, out of step with many rivals who profited from volatility during the Covid-19 pandemic.
The French lender in is the middle of revamping its markets business and exiting some areas.
This comes after losses in structured products wiped out earnings at its equities business in the first half of 2020.
SocGen still beat profit forecasts overall for the fourth quarter, as charges linked to the Covid-19 pandemic came in lower than expected, helping it offset the trading lag.
But it also posted a full year loss of €258m for 2020 as restructuring charges linked to its attempts to overhaul its investment banking business weighed.
SocGen's revenue from fixed-income and currencies trading was down 16% while in equity trading, revenue fell by 7% year-on-year, though it improved from a quarter earlier.
At BNP Paribas, revenue jumped by 22% in fixed-income, currencies and commodities trading while equities revenue fell by 4.5%.
SocGen's poor performance in the fixed income business will pile further pressure on chief executive Frederic Oudea to show signs his markets turnaround plan can pay off.
The lender will unveil on May 10 a review of its corporate and investment banking operations.
SocGen has exited or cut back some corporate and investment banking activities, such as commodities trading.
The bank also said last year it would gradually stop selling some structured products that have been particularly responsive to market swings during the crisis.
Société Générale said its net income dropped by 28% to €470m in the fourth quarter while revenue fell by 6%.
Its cost of risk, which reflects bad loan charges, rose by 85.7% year on year to €689m over the period, but that was less than forecast by analysts.
Lenders globally have been trying to grapple with the effects of the health crisis, including by setting aside funds to deal with loans that could turn sour in a downturn, though this pressure has begun to ease in recent months.
Economies are expected to gradually recover this year from the worst of the Covid-19 pandemic, and like its French rival BNP Paribas, SocGen said bad loan provisions should fall.
SocGen said it planned to pay a dividend of €0.55 per share in cash in May, in line with recommendations set by the European Central Bank to preserve capital within the coronavirus crisis.
The lender also said it would launch a share buyback plan in the fourth quarter of 2021 for about €470m.