Societe Generale earnings q1 2021

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A logo outside a bank branch of Societe Generale SA in Paris, France.

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LONDON – French bank Societe Generale reported a “record quarter” for its trading division, helping to beat analysts’ expectations for the first three months of 2021.

The net profit for the first quarter amounted to 814 million euros, the lender announced on Thursday. Analysts expected a net profit of 204 million euros.

Societe Generale received a significant boost from its Global Markets division, in which sales reached 1.65 million euros and the level of activity was the highest since the first quarter of 2017.

Revenue from fixed income securities and currency activities increased 51% from the previous quarter. In the equity business, sales rose 44%.

“Equity trades had their best quarter since 2015 with remarkable performance in every region, with all activities benefiting from good market conditions,” the bank said in its press release.

William Kadouch-Chassaing, CFO of the bank, told CNBC on Thursday that it was “an excellent quarter across the board”.

“We’re back to normal so I would expect us to continue down this path as the economic situation develops as it is now,” he said.

Further highlights of the quarter:

  • Sales amounted to 6.2 billion euros compared to 5.2 billion in the previous year.
  • The expenditure remained almost unchanged compared to the previous year at 4.7 billion euros.
  • The CET 1 rate, a measure of the solvency of banks, was 13.5% after 13.4% at the end of 2020.

For the future, the bank expects a slight increase in “commercial risk costs” over the course of the year. It increased its provision for non-performing loans by € 300 million and reduced its provision for non-performing loans by € 24 million.

Kadouch-Chassaing told CNBC that the bank will keep the same provisions for the remainder of the year.

“What we are seeing now is clearly a very low level of defaults. There is no indication that there will be an increase. It can happen at some point, but we are not seeing that yet, so it is important to deploy it carefully for keep the timing and when it happens, “he said.

Societe Generale’s shares are up nearly 40% since the start of the year.