{"id":9791,"date":"2017-08-05T15:06:38","date_gmt":"2017-08-05T15:06:38","guid":{"rendered":"http:\/\/dominiclevent.com\/blog\/?p=9791"},"modified":"2019-04-17T17:17:11","modified_gmt":"2019-04-17T17:17:11","slug":"socgens-litigation-cloud-lingers-over-international-growth-bloomberg","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/socgens-litigation-cloud-lingers-over-international-growth-bloomberg\/","title":{"rendered":"SocGen&#8217;s Litigation Cloud Lingers Over International Growth &#8211; Bloomberg"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p><a itemscope=\"itemscope\" itemprop=\"StoryLink\" href=\"https:\/\/www.bloomberg.com\/quote\/GLE:US\" title=\"Company Overview\"><meta itemprop=\"active\" content=\"true\"\/><meta itemprop=\"type\" content=\"SecurityLink\"\/><meta itemprop=\"url\" content=\"bbg:\/\/securities\/GLE%20US%20Equity\"\/><meta itemprop=\"security\" content=\"GLE US Equity\"\/>Societe Generale SA\u2019s <\/a>continued struggle with litigation for past misconduct is overshadowing a jump in demand for structured products and a brighter picture for consumer banking in eastern Europe.<\/p>\n<p>France\u2019s third-largest bank said Wednesday that it increased legal provisions by 300 million euros ($354 million) for disputes that it didn\u2019t specify. Societe Generale\u2019s <a itemscope=\"itemscope\" itemprop=\"StoryLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-05-04\/societe-generale-profit-falls-as-it-settles-libya-legal-dispute\" title=\"SocGen Profit Drops After $1 Billion Libya Legal Settlement (4)\" target=\"_blank\"><meta itemprop=\"active\" content=\"true\"\/><meta itemprop=\"type\" content=\"StoryLink\"\/><meta itemprop=\"suid\" content=\"OPFFUY6K50YM\"\/>963 million-euro settlement<\/a> in May with the Libyan Investment Authority, already covered by the bank\u2019s cash pile for legal provisions, led to accounting effects on revenue, taxes and provisions in the second quarter, but had a neutral effect on the bottom line and capital position.<\/p>\n<aside class=\"inline-newsletter\" data-state=\"ready\"><input id=\"active-newsletter-id\" type=\"hidden\" value=\"markets\"\/><input id=\"active-newsletter-group\" type=\"hidden\" value=\"default\"\/><input id=\"user-subscription-email\" type=\"hidden\" value=\"\"\/><\/p>\n<div class=\"inline-newsletter__main\">\n<div class=\"inline-newsletter__content\">\n<p>\n                        The most important market news of the day.\n                    <\/p>\n<p>\n                        Get our markets daily newsletter.\n                    <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/aside>\n<p>French lenders\u2019 prowess in derivatives, where SocGen Chief Executive Officer\u00a0Frederic Oudea had a stint in his early years at the bank, has made them some of Europe\u2019s best performers in recent years. While appetite for structured products helped the firm\u2019s trading revenue drop less than many peers in deep overhaul mode, such as <a itemscope=\"itemscope\" itemprop=\"StoryLink\" href=\"https:\/\/www.bloomberg.com\/quote\/DBK:GY\" title=\"Company Overview\"><meta itemprop=\"active\" content=\"true\"\/><meta itemprop=\"type\" content=\"SecurityLink\"\/><meta itemprop=\"url\" content=\"bbg:\/\/securities\/DBK%20GY%20Equity\"\/><meta itemprop=\"security\" content=\"DBK GY Equity\"\/>Deutsche Bank AG<\/a>, SocGen is still dealing with the legacy of alleged past misconduct, including a U.S. probe into violations of trade sanctions.<\/p>\n<p>\u201cWe have these litigations, we\u2019ll try to put that behind us as quickly as possible,\u201d Oudea said in an interview with Bloomberg Television. For now, \u201cthere is no significant development\u201d on any outstanding legal cases, he said.<\/p>\n<p>The higher legal charges helped push second-quarter net income down 28 percent to 1.06 billion euros, in line with the average estimate of six analysts compiled by Bloomberg. The stock declined as much as 4.3 percent to 48 euros and was trading down 3.3 percent to 48.5 euros as of 9:09 a.m. local time.<\/p>\n<h3>Capital Strength<\/h3>\n<p>The bank\u2019s common equity Tier 1 ratio, a measure of financial strength, rose to 11.7 percent at the end of June from 11.6 percent three months earlier, partly helped by the effects of the initial public offering of its car-leasing unit ALD SA.<\/p>\n<p>Societe Generale slightly trailed expectations in equities and beat them in fixed income, the <a itemscope=\"itemscope\" itemprop=\"StoryLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-07-28\/bnp-paribas-outshines-deutsche-bank-after-equity-trading-soars\" title=\"BNP Shows Europe Can Still Build Investment-Bank Champions (1)\" target=\"_blank\"><meta itemprop=\"active\" content=\"true\"\/><meta itemprop=\"type\" content=\"StoryLink\"\/><meta itemprop=\"suid\" content=\"OTSFR56VDKJC\"\/>opposite pattern<\/a> to BNP Paribas SA and HSBC Holdings Plc, two of the better performers this earnings season, which reported some of the smallest drops in trading revenue during a weak quarter across the securities industry.<\/p>\n<p>\u201cThe economic perspectives are better, so I think we can still see activity on the corporate side\u201d and \u201con the markets we have had very low volatility also because probably people were waiting for some elections,\u201d Oudea said. Following elections in Europe, \u201cthings could potentially improve I guess with more flow and more volumes,\u201d he said, without providing a specific revenue guidance.<\/p>\n<p>SocGen\u2019s equity-trading sales fell 3.3 percent to 549 million euros, compared with the 559 million-euro average analyst estimate surveyed by Bloomberg News. Revenue from buying and selling bonds, currencies, commodities and other debt products fell 6.8 percent to 586 million euros, above analysts\u2019 estimates and a smaller drop than many rivals.<\/p>\n<p>\u201cRobust revenues on structured products\u201d were offset by \u201csoft cash and flow derivatives\u201d in the equities business, Societe Generale said. Demand for structured products was also sustained in its fixed-income business, although rates activity dropped, it said.<\/p>\n<p>Societe Generale\u2019s profit rose 11 percent when stripping out all exceptional items, including gains from acquisitions and disposals.<\/p>\n<p>Profit from international retail banking and financial services jumped 30 percent to 568 million euros as SocGen\u2019s Russian business confirmed it\u2019s profitable again, while net income from Romania more than doubled. In Russia, its biggest emerging market, net income reached 31 million euros in the second quarter as provisions were \u201csubstantially lower.\u201d<\/p>\n<p><a itemscope=\"itemscope\" itemprop=\"StoryLink\" href=\"https:\/\/www.bloomberg.com\/quote\/GLE:FP\" title=\"Share movement\" target=\"_blank\"><meta itemprop=\"active\" content=\"true\"\/><meta itemprop=\"type\" content=\"FunctionLink\"\/><meta itemprop=\"security\" content=\"GLE FP Equity\"\/><meta itemprop=\"function\" content=\"GP\"\/>Societe Generale\u2019s shares<\/a> have risen 7 percent this year, trailing BNP Paribas\u2019s 10 percent gain and Credit Agricole SA\u2019s 26 percent increase. Over the past 12 months, though, SocGen is up 70 percent, fifth-most in the Bloomberg Europe 500 Banks Index.<\/p>\n<p>Under Oudea, who is working on unveiling new 2020 targets this November, Societe Generale gets about a third of its revenue from French retail banking, a third from financial services and international networks, and the rest from global banking and investor solutions, a business that includes trading as well as private banking and lending to large corporations.<\/p>\n<p>At home in France, revenue keeps contracting because of record low interest rates. Income at SocGen\u2019s French consumer-banking networks fell about 2 percent to 2.05 billion euros in the second quarter, as the unit\u2019s profit slumped 11 percent.<\/p>\n<p><em>\u2014 With assistance by Caroline Connan, and Chris Malpass<\/em><\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-08-02\/socgen-litigation-cloud-lingers-over-international-banking-gains\">Source link <\/a><br \/>\n<a href=\"https:\/\/dominiclevent.com\/contact-us\/\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/dominiclevent.com\/blog\/wp-content\/uploads\/2017\/01\/footer-300x100.png\" alt=\"\" width=\"600\" height=\"200\" class=\"aligncenter size-medium wp-image-14\" srcset=\"https:\/\/dominiclevent.com\/blog\/wp-content\/uploads\/2017\/01\/footer-300x100.png 300w, https:\/\/dominiclevent.com\/blog\/wp-content\/uploads\/2017\/01\/footer-150x50.png 150w, https:\/\/dominiclevent.com\/blog\/wp-content\/uploads\/2017\/01\/footer.png 600w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Societe Generale SA\u2019s continued struggle with litigation for past misconduct is overshadowing a jump in demand for structured products and a brighter picture for consumer banking in eastern Europe. France\u2019s third-largest bank said Wednesday that it increased legal provisions by 300 million euros ($354 million) for disputes that it didn\u2019t specify. Societe Generale\u2019s 963 million-euro &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/dominiclevent.com\/blog\/socgens-litigation-cloud-lingers-over-international-growth-bloomberg\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;SocGen&#8217;s Litigation Cloud Lingers Over International Growth &#8211; Bloomberg&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-9791","post","type-post","status-publish","format-standard","hentry","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SocGen&#039;s Litigation Cloud Lingers Over International Growth - Bloomberg - Dominic Levent Solicitors Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dominiclevent.com\/blog\/socgens-litigation-cloud-lingers-over-international-growth-bloomberg\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SocGen&#039;s Litigation Cloud Lingers Over International Growth - Bloomberg - Dominic Levent Solicitors Blog\" \/>\n<meta property=\"og:description\" content=\"Societe Generale SA\u2019s continued struggle with litigation for past misconduct is overshadowing a jump in demand for structured products and a brighter picture for consumer banking in eastern Europe. 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