Societe Generale SA reported a 23 per cent decline in first-quarter profit on increased provisions for risky loans and writedowns tied to the US subprime mortgage market collapse.
Net income fell to €1.1 billion ($1.71 billion), or €2.06 a share, from €1.43 billion, or €3.26, a year earlier, the Paris-based bank said in a statement today.
Societe Generale's board backed Frederic Oudea yesterday to succeed Daniel Bouton as chief executive officer, after unauthorized trading by Jerome Kerviel led to €4.9 billion in losses.
The bank announced the trading loss in January and booked it in the fourth quarter of last year, when the company also had €2.05 billion of subprime-related writedowns and provisions.
Societe Generale fell 23 per cent this year in Paris trading, compared with a 9.3 per cent decline at BNP Paribas SA, its larger French competitor, and a 10 per cent slump in Credit Agricole SA, the country's number three bank by market value.
Societe Generale blames Kerviel for amassing €50 billion in positions in European stock index futures backed by fake hedges and false documents. Unwinding the holdings resulted in the biggest trading loss in banking history.
The French bank had a €3.35 billion loss in the fourth quarter and in March raised €5.5 billion in a rights offer to replenish capital depleted by the trading scandal and asset markdowns.