Societe Generale SA said it expected bad-loan provisions for the year to fall significantly after it beat expectations in the first quarter, as its global markets business had the best quarter in years and the bank slashed the money it stowed away for potential loan losses.
Net profit for the period was 814 million euros ($977.2 million), the French bank said Thursday. This compares with a loss of EUR326 million a year earlier, when soaring provisions and a collapse in stock-trading revenue hit the results, and analysts expectations of a EUR228 million profit, according to a consensus provided by FactSet.
Revenue rose 21% to EUR6.25 billion, also beating expectations of EUR5.92 billion.
France’s third-largest listed bank by assets posted a 66% drop in provisions for soured loans, which stood at EUR276 million in the quarter.
“Global Markets enjoyed a record quarter, with the highest level of activity” since the first quarter of 2017, it said. The equity businesses had their best quarter since 2015. Revenue at the global banking and investor solutions unit, which includes investment banking and asset management, rose 54% on year.
The lender expects cost of risk to be between 30 and 35 basis points this year, compared with 64 basis points last year. This is a measure of risk level of business activities which compares provisions to cover potential loan losses with the volume of outstanding loans.