PARIS (AP) — Societe Generale saw its net profit more than double in the second quarter thanks to lower writedowns on past acquisitions.
The French bank reported Thursday net profit of 955 million euros ($1.3 billion) for the April to June quarter, compared to 436 million euros a year earlier when earnings were hit by writeoffs on assets in the U.S. and Russia.
However, in the first half, Societe Generale's operating profit slumped nearly 44 percent to 1.4 billion euros following a near 1 billion euro loss from the reevaluation of financial liabilities.
Societe Generale has been hit hard by Europe's debt crisis given its exposure to Greek bonds, which plummeted in value. The bank said earlier this year that it had completed a program to get rid of bad investments and loans.
The bank's second quarter earnings were flattered by comparison with the year earlier period, when Societe Generale took a 200 million euro writedown against TCW, a California-based asset management firm it acquired in 2001. Those year-earlier results also included a 250 million euro writedown against Societe Generale's Russian retail bank unit Rosbank.
Societe Generale's corporate and investment banking arm's performance rebounded sharply in the second quarter, thanks to the end of the year-and-a-half-long program of off-loading poorly performing loans and reversing costly foreign expansion. The division saw its revenue rise 38 percent and operating profit more than triple thanks to strong results in its structured products and equity derivatives businesses.
That represented a sharp contrast with cross-town rival BNP Paribas, which Wednesday blamed "renewed tensions in the markets" for a drop in earnings from its corporate and investment banking arm.
Ironically it was Societe Generale's equity derivatives business that five years ago also caused such damage to the bank when rogue trader Jerome Kerviel's unauthorized and unhedged 49 billion euro position came to light. The bank eventually lost nearly 5 billion euros to unwind the trades.
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