Paris: French bank Societe Generale SA said on Wednesday it expects 2009 to remain challenging after a turbulent fourth quarter in which it nonetheless posted a profit thanks to earnings in retail banking.
SocGen posted net profit of €87 million ($109.92 million) in the fourth quarter, compared with a €3.35 billion loss in the same period of 2007, when it booked €4.9 billion in losses from a trading scandal.
“The environment will probably remain challenging in 2009,” SocGen said in a statement. During the fourth quarter, SocGen said net profit at its French retail bank held up well, down just 1.3% to euro311 million.
It posted a net loss of €76 million in its international banking division after taking a €300 million goodwill writedown on its Russian operations, where it is the majority shareholder of Rosbank. That compares with a profit of €202 million a year earlier.
Russia is grappling with its worst financial crisis in a decade, and Moody’s Investors Service said Tuesday it could reduce ratings on Western banks with exposure in Eastern Europe.
The investment banking unit posted a €56 million net profit compared with a €3.92 billion loss in the same quarter of 2007, when it booked the exceptional loss from closing the unauthorized positions of former trader Jerome Kerviel. SocGen’s results compare favorably with many banks in the US and Europe, which suffered huge losses in the quarter.
France’s biggest bank, BNP Paribas SA, which reports Thursday, has said it expects a €1.4 billion net loss in the fourth quarter.
SocGen is hoping to turn the page on the Kerviel affair, which was uncovered in January of last year. The scandal has since been overshadowed by mounting subprime related losses and the collapse of some of Wall Street’s most storied names.
The financial crisis has also blown up other scandals not least, one allegedly involving Bernard Madoff, the disgraced New York money manager accused of orchestrating a $50 billion Ponzi scheme. SocGen said it had “negligible” exposure of below euro10 million to the fraud.
In the full year, SocGen posted a net profit of €2.01 billion, compared with €947 million a year earlier.