SocGen net profit falls 23 pct, beats consensus

Societe Generale, the French bank hit by the world's worst rogue trader scandal, reported a 23.4 percent fall in first quarter net profit although earnings came in above the average market forecast. Net profit fell to 1.096 billion euros ($1.69 billion), mainly due to a 79 percent fall in net profit at its corporate and investment banking division and a loss at SocGen's global investment management unit. Twenty analysts polled by Reuters had forecast, on average, net profit of 924 million euros.

Gross operating profit fell 24 percent to 1.774 billion euros, also above an average forecast of 1.749 billion euros. "The headline figures look better than expected," said West LB analyst Christoph Bossmann, who kept a "hold" rating on SocGen shares.
Profits were boosted by a 602 million euro capital gain related to the creation of Newedge, the new broker set up in partnership with French bank Credit Agricole.

On Jan 24, SocGen announced 4.9 billion euros of losses which it said were caused by rogue deals carried out by Jerome Kerviel, then a junior trader at the bank.
SocGen is the first of France's major banks to issue first quarter results. France's biggest listed bank BNP Paribas reports earnings on Wednesday while Credit Agricole posts results on Thursday. SocGen said it had made further writedowns of around 1.2 billion euros at its investment banking arm during the first quarter due to the global credit crisis.

The trading losses have renewed speculation that SocGen could be taken over, but SocGen said the first quarter results showed its ability to overcome the setback from the trading scandal. The global credit crunch has so far led to a mixed set of first quarter results from the world's top banks.

Last month, Credit Suisse, UBS and Deutsche Bank posted first quarter losses while this week HSBC reported higher first quarter profits.