GLE Societe Generale SA

   By Pietro Lombardi 
 

Societe Generale SA (GLE.FR) reported results for the fourth quarter and full-year on Thursday. Here's what you need to know:

PROFIT: Net profit for the period was 624 million euros ($710.4 million), beating analysts' expectations of EUR450.3 million, according to a consensus forecast provided by FactSet. The bank had a profit of EUR69 million in the same period last year, when one-offs, including charges related to tax reforms in France and the U.S., weighed on the results.

REVENUE: Net banking income, SocGen's top line, declined 6.3% on year to EUR5.93 billion. Analysts had expected net banking income of EUR5.94 billion

WHAT WE WATCHED

-REVISED TARGETS: SocGen revised its 2020 targets after weak trading revenue hit its investment-bank operations in the fourth quarter. SocGen now targets a RoTE--a key measure of profitability--of between 9% and 10% in 2020, down from a previous estimate of 11.5% in its plan. The bank also said that its expected 2020 revenue will take a roughly EUR500 million hit from the new interest-rates scenario in the eurozone.

-GLOBAL BANKING AND INVESTOR SOLUTIONS: The division, which includes investment banking and asset management, has a 6.9% decline in revenue in the fourth quarter while the net income was down more than 50%.

Revenue from the global-markets and investors-services business declined 19%, with fixed-income, currencies and commodities revenue down 29% from the same period last year. Equity revenue fell 16% on year.

SocGen said it targets additional cost cuts of roughly EUR500 million in 2020 in its global-banking and investor-solutions division. It is also replacing its head of the global markets business Frank Drouet with Jean-François Gregoire.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

February 07, 2019 05:45 ET (10:45 GMT)

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