Societe Generale profit leaps as risk costs cut

French bank Societe Generale said Thursday its third quarter earnings leapt 56.6 percent to 836 million euros ($1.0 billion), beating expectations, in large part due to reduced risk costs.
The bank was able to cut its provisions, money set aside to cover possible loan losses, from 1.1 billion to 642 million.
Net banking income slid 1.8 percent to 5.9 billion euros when excluding re-evaluation of the value of debt, but operating income jumped 82 percent to 1.2 billion euros and operating expenses were trimmed by 0.7 percent.
The bank's chief executive Frederic Oudea said the quarterly results confirmed the good "commercial momentum of the Societe Generale Group’s businesses".
He said the good result was "thanks to good control of operating expenses and the confirmed decline in the cost of risk despite a lacklustre economic environment."
The bank raised its common equity Tier 1 ratio -- a measure of the capital it has available to absorb losses -- to 10.4 percent at the end of September, an increase from 10.2 percent at the end of June and 9.9 percent on year ago.
For the first nine months of the year, Societe Generale's net profit was up 17.7 percent to 2.2 billion euros, while net banking income rose 4.2 percent to 17.4 billion.
Societe Generale's share price dropped by 2.3 percent to 37.13 euros in morning trading.