Societe Generale, the French bank, announced on Thursday that it had achieved a net profit of €900 million in the second quarter of this year. This marks a significant improvement from the same period last year when the bank experienced a loss of €1.51 billion due to the sale of its operations in Russia.
While the bank’s profit numbers were encouraging, its revenue did experience a decline. Net banking income for the quarter stood at €6.29 billion, down 8.9% compared to last year. This drop was mainly attributed to lower net interest margins in France and an overall challenging global banking environment.
Within its divisions, Societe Generale noted a significant decline in revenue for its French retail banking segment, which fell by 13.6% compared to the previous year. This decrease was primarily driven by the decrease in the net interest margin, despite a strong performance from its private banking sector. Additionally, revenue in the global banking and investor solutions division dropped by 7.3% due to a slower market.
Analysts had predicted a quarterly net profit of €725 million and revenue of €6.44 billion for Societe Generale. However, the bank exceeded these expectations.
Looking ahead, Societe Generale remains optimistic about managing its risk costs. The net cost of risk for the second quarter was reported at €166 million, or 12 basis points, down from 15 basis points in the same period last year. The bank anticipates that the cost of risk in 2023 will be below 30 basis points.
Overall, these results showcase Societe Generale’s resilience and ability to bounce back from previous setbacks. With a focus on mitigating risk and navigating challenging market conditions, the bank aims to continue delivering strong performance in the future.