SocGen Limits Investment Bank's Profit Drop in Q1

SocGen Limits Investment Bank's Profit Drop in Q1

Societe Generale, a major French bank, reported a first-quarter net income decrease of 22% to €680 million, surpassing the €463 million projection based on the average of 15 analyst estimates. This decline was partially due to weaker performances in its retail bank and fixed-income trading. However, the investment banking division of the bank experienced a notable 26.4% increase in earnings, amounting to €690 million, exceeding expectations despite a 5.1% drop in revenues to €2.62 billion.

The bank observed a downturn in its fixed-income and currencies trading, which fell by 17%, while equity derivatives sales, traditionally a strong suit for Societe Generale, saw a significant rise. Despite the mixed results across its various divisions, Societe Generale did not disclose figures for its French retail activities as an independent segment.

Adding to the financial dynamics of the quarter, the bank pointed to an expensive hedging strategy that incurred a cost of €300 million in the first quarter and is expected to total €1.6 billion in 2023. Societe Generale's CEO, Slawomir Krupa, is focused on enhancing performance and cutting costs amidst these financial headwinds. This performance comes in a broader context where several European banks have surpassed expectations, with some even increasing their profit forecasts for the year.


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