Redemption song

3 August 2020 By Christopher Thompson Follow @CGAThompson

Rising bad debt plunged the French bank to a 1.6 bln euro half-year loss. Equities trading was dire even as investment banking rivals made money. A pledge to keep full-year credit charges subdued may be CEO Frederic Oudea’s last chance to revive the lender’s bombed-out valuation.

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French bank Société Générale on Aug. 3 reported an operating loss of 171 million euros for the first half of 2020, mostly due to bad-debt provisions which more than tripled year-on-year to 2.1 billion euros.

The lender’s investment bank reported an operating loss of 801 million euros as losses in equity derivatives more than offset buoyant fixed-income trading. Chief Executive Frederic Oudea announced a further restructuring of the division to save 450 million euros by 2022-23.

SocGen reported a common equity Tier 1 capital ratio of 12.5% at the end of June, down from 12.6% at the end of the first quarter.

Oudea said the bank targeted underlying operating expenses of 16.5 billion euros this year and annual credit provisions “at the low end” of a range between 70 basis points and 100 basis points of outstanding lending.

Shares in SocGen were down 2% at 12.7 euros by 0800 GMT on Aug. 3.

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