💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

SocGen shares climb on smaller-than-expected quarterly profit dip

Published 05/03/2024, 05:55 AM
© Reuters.

Investing.com -- Shares in Societe Generale (EPA:SOGN) rose on Friday after the French bank posted a smaller-than-anticipated decline in profit in the first quarter.

Net income in the opening three months of 2024 slipped by 22% from the year-ago period to 680 million euros, although this topped company-compiled analyst estimates of 463 million euros. Sales of 6.65 billion euros were also ahead of projections.

In a note to clients, analysts at Jefferies credited strength at SocGen's corporate and investment bank with underpinning the revenue surprise and offsetting weakness at its retail banking unit and fixed income trading.

SocGen becomes the latest European lender to deliver higher-than-expected quarterly returns, reflecting a boost provided by persistently elevated interest rates in the euro zone. Increased costs of deposit in France, however, have dented earnings at banks in the country.

The Jefferies analysts also noted that 41% jump in cost of risk to 247 million euros due to unidentified specific cases presented a "rub" in the results.

But SocGen backed its existing targets for its 2024 and 2026 financial years, guiding for a statuatory return on tangible equity of above 6% this year and 9% to 10% in 2026.

"[W]e see a recovery in French retail revenues as the key profit growth driver for SocGen," analysts at UBS said in a note to clients. "The focus today is on understanding the trajectory for the earnings mix, especially around the domestic business, in what remains of 2024."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.