SocGen 3rd Q profit falls 84% was tied to Lehman Bankruptcy and US Bond

Former Societe Generale junior trader Jerome Kerviel (C) arrives
with lawyers Francis Tissot (L) and Caroline Wassermann (R) at
the financial investigation unit in Paris October 16, 2008.
Reuters/Benoit Tessier (FRANCE)
From Bloomberg
November 3, 2008 01:00 EST

Societe Generale SA, France's third- largest bank, said third-quarter profit fell a more-than- estimated 84 percent as credit-related writedowns resulted in losses at the investment-bank and asset-management units.

Net income dropped to 183 million euros ($234 million) from 1.12 billion euros a year earlier, the Paris-based bank said in an e-mailed statement today. The median estimate of 12 analysts surveyed by Bloomberg was a profit of 581 million euros.

Societe Generale recorded markdowns of at least 1.4 billion euros in the third quarter, including 447 million euros related to the bankruptcy of Lehman Brothers Holdings Inc. and 453 million euros tied to U.S. bond insurers.

The corporate and investment bank unit had a net loss of 244 million euros in the third quarter, while Societe Generale Asset Management had a loss of 6 million euros. Profit declined 5 percent at the French consumer-banking unit and rose 48 percent at the international retail operations.

Profit from Societe Generale's international banking business rose to 255 million euros from 172 million euros a year earlier, buoyed by the Czech Republic, Russia and Romania, Societe Generale became the majority shareholder in February of OAO Rosbank, which has 3 million individual customers in Russia.

Societe Generale Asset Management's third-quarter loss compares with a year-earlier profit of 40 million euros. The unit was hurt by falling stock markets and 7.9 billion euros of outflow of funds. Assets under management fell to 298 billion euros at the end of September from 309.2 billion at the end of June. The results exclude Lyxor Asset Management, which had 70.3 billion euros under management on Sept. 30. Earnings from consumer banking in France fell to 345 million euros from 364 million euros. Revenue at the French retail operations will probably rise between 1 percent and 2 percent in 2008

To limit loan losses, Societe Generale will be ``more selective'' in making loans in Romania.

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Sources :

Bloomberg: Societe Generale Third-Quarter Profit Falls 84%, Hurt by Lehman , November 3, 2008 01:00 EST

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