Headquarters of the French bank Societe Generale in Paris.
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Societe Generale on Wednesday reported better-than-expected earnings, despite taking a 3.3 billion euro ($3.36 billion) hit from the exit from its Russian operations.
The French lender saw each unit grow in the second quarter, which helped offset the impact of its departure from Russia in the wake of Moscow’s invasion of Ukraine.
According to Refinitiv, analysts projected a net loss of 2.85 billion euros for the quarter, however, the bank reported a net loss of 1.48 billion euros.
“We added strong revenue growth and underlying profitability of over 10% (ROTE) in the first half of 2022, and we were able to exit Russian activities without significant capital impact and without impeding the Group’s strategic growth.” Oudia, the chief executive officer of Frederick Group, said in a statement.
Speaking to CNBC, Oudéa described the decision to exit Russia as “very sad” but a necessary one.
“When you invest successfully for many years, it is very sad, but when you look at the situation it is so hard to manage, it is so risky to move forward, it all has no clear results. So it was clear that it was the best decision.” He told CNBC’s Charlotte Reid.
Other highlights for the quarter:
- Revenue for the quarter was 7 billion euros.
- Operating expenses reached 4.5 billion euros.
- The CET1 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% from the previous quarter. International retail banking also grew 33% from the previous three-month period. The Global Banking unit also reported a nearly 50% jump in net income from the previous quarter.
Going forward, the French bank said it aims to achieve tangible equity, a measure of profitability, in 2025 with a CET 1 ratio of 10% and 12%. It also seeks average annual revenue growth above or equal to 3%. Until then.
The stock is down 28% year-over-year.