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11th November 2011

Societe Generale profits down - dividend cancelled

Société Générale reported group net profit of €622m (£531m $848m ¥65.9bn Y5,369m) for Q3 and €2,285m (£1,951m $3,115m ¥242.1bn Y19,725m) for the 9 months DOWN 31% and DOWN 25% respectively. The group profit included a €822m gain from Debt Value Adjustment whilst taking a €333m write down on Greek bonds to make a total of 60% Greek writedown. Exposure to PIIGS sovereign debt has been reduced by approximately one half in the year to date.


No surprise that CIB profits were minimal, however this fall was partly made up from higher retail profits and the absence of the central writedowns of a year ago.


The requirement to achieve 9% CT1 (Core Tier 1) by June of next year has left the bank with €3.4bn to find. It has decided to do this by not paying any final dividend. In point of fact it had few options as the market has remained concerned over Société Générale and, for example, the bank has had to make extensive use of the European Central Bank liquidity funding. Despite the lack of final dividend the market believed the bank to be doing the right things and the share price increased by over 7% following the results announcement.


Income Summary 2011-Q3 2010-Q3 2011-9m 2010-9m
€m €m €m €m
Net banking income 6,504 6,301 19,626 19,561
Operating expenses -4,018 -4,039 -12,635 -12,105
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Gross operating income 2,486 2,262 6,991 7,456
Net allocation to provisions -1,192 -918 -3,255 -3,060
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Operating income 1,294 1,344 3,736 4,396
Net profits or losses from other assets 20 -2 84 -2
Companies accounted by equity method 32 33 110 91
Impairment losses on goodwill -200 0 -200 0
Income tax -455 -372 -1,142 -1,178
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Net income 691 1,003 2,588 3,307
Non controlling Interests 69 107 303 264
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Group Net Profit 622 896 2,285 3,043

Divisional net income
French Networks 390 340 1,126 931
International Retail Banking 90 149 250 388
Corporate & Investment Banking 77 468 1,117 1,419
Specialised Financial Services & Insurance -53 87 224 249
Private Banking, Global Investment
Management and Services 60 80 216 209
o.w. Private Banking 28 42 102 89
o.w. Asset Management 16 26 81 65
o.w. SG SS & Brokers 16 12 33 55
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CORE BUSINESSES 564 1,124 2,933 3,196
Corporate Centre 58 -228 -648 -153
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GROUP 622 896 2,285 3,043