Societe Generale headquarters in Paris.
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Societe Generale reported better-than-expected earnings on Wednesday despite a 3.3 billion euro ($3.36 billion) hit from its Russian exit.
The French bank saw a per-unit increase in the second quarter, which helped offset its departure from Russia following Moscow’s invasion of Ukraine.
Analysts had estimated a net loss of 2.85 billion euros for the quarter, but the bank posted a net loss of 1.48 billion euros, Refinitiv data showed.
“Our combination of strong revenue growth and underlying profitability of over 10% (ROTE) in the first half of 2022 allows us to manage the exit from Russia without significant capital implications and without hindering the group’s strategic development,” said Fréderic of the group CEO Oudéa said in a statement.
In an interview with CNBC, Oudéa said the decision to withdraw from Russia was “very sad” but necessary.
“It’s very sad when you’ve successfully invested for years, but when you look at it, it’s so unmanageable, the future is so risky, all without a clear outcome, so obviously it’s for the best decision,” he told CNBC’s Charlotte Reed.
Other highlights from the quarter:
- Revenue for the quarter was EUR 7 billion.
- Operating expenses amounted to EUR 4.5 billion.
- The CET 1 ratio, which measures banks’ solvency, was 12.9% at the end of June.
The French retail bank reported an 18.7 percent rise in net profit from the previous quarter. International retail banking also rose 33% from the previous three months. Net income in the global banking division also rose nearly 50% from the previous quarter.
Looking ahead, the French bank said it aims to achieve a 10% return on tangible equity (a measure of profitability) and a 12% CET 1 ratio by 2025. It also expects annual revenue growth to be above or equal to 3% until then.
The stock is down 28% so far this year.
