French lender Societe Generale SA (GLE.FR) said net profit dropped 28% in the second quarter, hit by litigation costs and persistently low interest rates.
The Paris-based bank, the country's third-largest listed bank by assets, said net profit fell to 1.06 billion euros ($1.25 billion) in the three months through June, from EUR1.46 billion a year ago in line with analysts' expectations.
Continue Reading Below
Revenue was down 26% at EUR5.2 billion after Societe Generale agreed to pay EUR963 million to settle claims that it paid a middleman alleged bribes to secure business from Libya's sovereign-wealth fund during the final years of dictator Moammar Gadhafi's rule.
The drop in revenue was also from a high base, as earnings in the year-ago period were buoyed by a EUR725 million gain on the sale of Societe Generale's shares in Visa Europe.
Excluding one-off items, revenue was down by just 1% as a strong investment-bank business offset lower retail banking revenue.
Societe Generale's global banking and investor-solution business--which includes investment banking, security services and asset management--posted a 11% increase in net profit to EUR499 million.
Net profit for its international retail banking and financial services division was up 30% at EUR568 million, buoyed by Central and Eastern European markets.
However, home-loan renegotiations and low interest rates pushed net profit for Societe Generale's French retail bank 11% lower to EUR359 million.
The bank continued to improve its capital buffers, raising its core Tier 1 ratio--which compares top-quality capital such as equity and retained earnings with risk-weighted assets--to 11.7% in June from 11.6% in March.
Write to Noemie Bisserbe at firstname.lastname@example.org
(END) Dow Jones Newswires
August 02, 2017 01:16 ET (05:16 GMT)