Revamped Societe Generale Triples Net Profit in 2013
French bank Societe Generale on Wednesday said it tripled net profit last year thanks to an improved balance sheet and would more than double the dividend payout to shareholders.
Shares in the bank, France's third biggest by assets, soared nearly six percent on the news, leading gains on the Paris CAC 40 index which was up just 0.41 percent in midday trading.
The once troubled Societe Generale, which has been implementing a big restructuring in recent quarters, said that profits last year reached 2.18 billion euros ($2.97 billion), on a par with analyst expectations as polled by Factset.
Performance in the fourth quarter alone ran ahead of expectations, with the bank registering a profit of 322 million euros, double what analysts had forecast.
Crucially, Societe Generale announced improved capital ratios in the fourth quarter and said that super safe assets now counted for 10 percent of total capital, well above the eight percent level required by new regulations.
This will be especially watched as the European Central Bank prepares an asset review of Europe's biggest lenders, a key plank for regulatory banking union across the EU.
The bank also said it had paid back all the cheap loans borrowed from the ECB two years ago in the height of the eurozone debt crisis.
The "structural transformation of the balance sheet is complete," Societe Generale chairman and chief executive Frederic Oudea said.
"As a result, the Group is in a position, in 2014 and beyond, to seize growth opportunities," he said.
The bank kept money set aside for legal trouble unchanged at 700 million euros for the year, more than enough to cover the 446 million euro fine handed it by the European Commission for manipulating the Euribor interbank rate.
On the negative side, net banking income shrank 1.2 percent in 2013 to 22.8 billion euros, lower than the 23.05 billion euros counted on by analysts.
The bank's board is to propose a dividend of one euro per share at the next shareholders' meeting in May, compared to 0.45 cents last year.
At the same meeting, the bank will present its new strategic plan, with one of its aims to achieve a 10 percent return on equity by the end of next year.
Source: Agence France Presse
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