SocGen’s turnaround plan on track as it increases revenue forecasts – .

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PARIS, Aug. 3 (Reuters) – French bank Societe Generale (SOGN.PA) on Tuesday raised its forecast for the full year as the lender returned to profit in the second quarter thanks to lower related charges the pandemic for bad debts and a rebound in its retail banking activity in France.

As a sign that CEO Frédéric Oudea’s recovery strategy is starting to bear fruit, Societe Generale now expects revenue growth in all of its businesses this year, including retail banking in France, which was a weak point.

Under pressure to increase profitability, Oudea attempted to revive the lender after losses from equity-linked derivatives wiped out equity trading in the first and second quarters of 2020, while a heavy retail banking structure hampered the growth.

France’s third-listed lender, after BNP Paribas (BNPP.PA) and Crédit Agricole SA (CAGR.PA), said its cost of risk, which reflects provisions for bad debts, would be lower than expected in 2021 on a 20 to 25 points, down from a previous forecast of 30 to 35 basis points.

SocGen also said its cost of risk fell 88.9% in the second quarter, mirroring that of rivals such as Spain’s BBVA (BBVA.MC) and BNP Paribas, which reduced provisions for unpaid loans then. that the global economy was gradually recovering from the worst of COVID. -19 crisis.

The lender posted a net profit of 1.44 billion euros in the second quarter (1.71 billion euros), against a loss of 1.26 billion euros a year earlier. Turnover increased by 18.2% to 6.26 billion euros.

In France, where the government ended a third nationwide foreclosure in mid-May, retail banking revenues rose 8.7%.

Revenues increased by 24.5% in its corporate and investment banking activities, which SocGen began to reorganize two months ago by reallocating resources to trading and reducing the exposure of its commercial arm. to market fluctuations.

Income from equity trading was five times higher than a year earlier, while fixed income and currency trading fell 33%.

SocGen shares have more than doubled since falling to near their 30-year lows in the fall of last year when they closed at 10.90 euros on September 25. The shares closed at 24.86 euros on Monday.

(1 $ = 0,8420 euros)

Report by Matthieu Protard; Additional reporting by Rachel Armstrong in London; Editing by Christian Schmolllinger and Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

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