By Noemie Bisserbe
PARIS-- Société Générale SA and Crédit Agricole SA, two of
France's biggest banks, said Wednesday that first-quarter net
profit was boosted by volatile markets and amid growing signs the
European economy is picking up.
Société Générale, France's third-largest listed bank by assets,
said net profit rose more than fivefold to EUR868 million ($972.32
million) in the three months to the end of March, as the bank
bounced back from heavy losses in Russia.
Crédit Agricole's net profit rose 3% to EUR784 million, as
strong earnings at its investment bank and the benefits of a weaker
euro were partly offset by a contribution to Europe's new bailout
fund.
French banks' earnings in the first quarter reflect the strong
performance of investment banks across Europe and the U.S., helped
by a rebound in stock markets and a long-awaited revival in
corporate loan demand.
Trading banks such as Société Générale, Crédit Agricole,
Deutsche Bank AG, and J.P. Morgan Chase & Co. received a boost
in the quarter following the Swiss National Bank's decision to
scrap its Swiss franc cap, the launch of the European Central
Bank's quantitative easing program and as the U.S. Federal Reserve
took steps to tighten monetary policy.
Crédit Agricole's investment bank posted a 24% increase in
revenue to EUR1.23 billion in the quarter, lifting total revenue by
8% to EUR4.36 billion. Société Générale's global banking and
investor solutions division, which includes investment banking,
security services and asset management, posted a 22% jump in
revenue to to EUR2.59 billion, pushing overall revenue 12% higher
to EUR6.35 billion.
Société Générale, however, continues to suffer from its exposure
to Russia. The country currently accounts for about only 5% of the
group's total revenue, although Société Générale once had big
ambitions there, betting that its local lender Rosbank would help
drive growth as Europe struggled to pull itself out of the
financial crisis.
Société Générale posted a EUR91 million loss in Russia in the
first quarter, hurt by its still faltering economy.
"The situation in Russia is going to stay difficult," deputy
chief executive Bernardo Sanchez Incera told reporters Wednesday.
Mr. Sanchez Incera said the bank expected to post a loss of between
EUR250 million and EUR300 million in 2015.
Société Générale's core tier-one ratio, which compares
top-quality capital such as equity and retained earnings with
risk-weighted assets, was stable at 10.1% at the end of March.
Crédit Agricole's core tier-one ratio stood at 10.2%, down from
10.4% on Jan. 14.
Rival French lender BNP Paribas SA said last week that
first-quarter net profit rose 18% to EUR1.65 billion in the three
months through March, buoyed by its investment bank and a weakening
euro.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
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