PARIS – Societe Generale has reshuffled its management team and will seek cost cuts after swinging to a fourth-quarter loss on the back of a weak euro zone economy and one-off charges.
France's No. 2 listed bank said finance chief Bertrand Badre - who is stepping down to join the World Bank after only a year in the job - would be replaced by his deputy Philippe Heim, while Jacques Ripoll, head of its GIMS asset-gathering division, was leaving the group, as Reuters reported on Tuesday.
The bank pledged to cut costs over the next three years with its new team and a revamped structure, without giving details.
Like most European banks, SocGen is under pressure to rethink its business model to boost profits in a post-credit crunch crisis world of tougher regulations, volatile financial markets and government budget cuts.
SocGen racked up a quarterly net loss of 476 million euros ($641 million), it said on Wednesday, compared with a net profit of 100 million for the same period a year earlier. Analysts had been expecting a loss closer to 237 million, according to a Reuters poll of eight banks and brokerages.
"Despite the small disappointment today we see the downside (to the shares) as limited," analyst Guillaume Tiberghien at brokerage Exane BNP wrote in a note. "Domestic retail revenues were stable, which will reassure."
SocGen shares traded in Frankfurt edged up 0.9 percent.
The bank blamed "significant" one-off quarterly charges, which it had flagged last month as accounting losses on the value of its own debt and a goodwill writedown for its Newedge brokerage joint venture with Credit Agricole .
It also warned of the weak economic backdrop in Europe, citing rising loan-loss provisions at its French and Romanian operations, and said Russian unit Rosbank had lost money in 2012.
One unexpected charge was a 300 million-euro legal provision booked for 2012. SocGen gave no details about the charge.
"A messy set of fourth-quarter figures, with multiple exceptional items," said a Paris-based trader, citing the litigation provision as a negative surprise.
The bank will pay a dividend of 0.45 euros per share, after skipping a shareholder payout last year, having reached the end of a year-long drive to beef up its balance sheet by selling assets, cutting costs and laying off staff.
Shares of SocGen are up 15 percent year-to-date, compared with a 9 percent rise for the STOXX Europe 600 banks index <.SX7P>.
($1 = 0.7427 euros)
(Editing by David Holmes and Mark Potter)