French lender Societe Generale reported a consolidated net loss of €1.5bn ($1.5bn) for Q2 vs. a net profit of €1.4bn ($1.4bn) in the last year. However, the result beat analyst expectations of a net loss of €2.3bn ($2.3bn). The loss was attributed to the disposal of Rosbank and the fact that insurance activities in Russia are recognized under net losses from other assets, for an amount of around €3.3bn ($3.4bn) before tax. Total revenues increased 12.8% YoY to €7.1bn ($7.2bn). French Retail Banking revenue grew 8.5% to €2.2bn ($2.2bn) on commercial momentum, and a high level of service fees. International Retail Banking & Financial Services posted a revenue growth of 21.4% YoY to €2.2bn ($2.2bn) and Global Banking and Investor Solutions generated €2.6bn ($2.7bn), 18.3% higher YoY. Provisions rose 52.8% YoY to €217mn ($221.1mn). The cost-to-income ratio fell 340bp YoY to 61.8% in Q2. The group’s gross non-performing loans ratio improved 30bp YoY to 2.8%. During the quarter, the lender launched its 2021 share buyback programme, for around €915mn ($932mn) and declared a dividend of €1.4/share. The bank has guided for a revenue CAGR of 3% for the next 3 years, improvements to the cost-to-income ratio by bringing it below 62%, and a sustainable finance target of €300bn ($306bn) by 2025. The bank’s CET1 ratio stood at 12.9%, down 50bp YoY.
SocGen’s 4.75% perp is trading at 87.75, down 0.42 points at a yield of 8.58%.