Headquarters of the French bank Societe Generale in Paris.
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Societe Generale Wednesday reported better-than-expected earnings despite a 3.3 billion euro ($3.36 billion) hit from exiting its Russian operations.
The French lender saw every unit grow in the second quarter, helping to offset the impact of its departure from Russia following Moscow’s invasion of Ukraine.
Analysts estimated a net loss of 2.85 billion euros for the quarter, according to Refinitiv, however, the bank posted a net loss of 1.48 billion euros.
“In the first half of 2022, we combined strong revenue growth and underlying profitability above 10% (ROTE) and we were able to manage our exit from Russian activities without a significant capital impact and without handicapping developments. the Group’s strategies,” Fréderic Oudéa, the group’s chief executive, said in a statement.
Speaking to CNBC, Oudéa called the decision to leave Russia “very sad,” but necessary.
“When you invest successfully for many years, it’s very sad, but when you look at the situation, it’s so difficult to manage, so risky in the future, without a clear result of all this, so it was clear that was the best decision.” he told CNBC’s Charlotte Reed.
Other highlights of the quarter:
- Revenue was 7 billion euros for the quarter.
- Operating expenses reached 4.5 billion euros.
- The CET 1 ratio, a measure of bank solvency, stood at 12.9% at the end of June.
The French retail bank posted a net profit up 18.7% compared to the previous quarter. International retail banking was also up 33% from the previous quarter. The Global Banking unit also posted a nearly 50% jump in net profit from the previous quarter.
Going forward, the French bank said it aims for a tangible return on equity, a measure of profitability, of 10% and a CET 1 ratio of 12% in 2025. It also wants higher average annual revenue growth. or equal to 3% so far.
The stock is down 28% since the start of the year.