Société Générale, France’s second-largest bank, said it expects to report “slightly positive” net income in the second quarter, helped by its corporate and investment banking division.
Net banking income will be hurt by a €1.3 billion ($1.8 billion) write-down on credit default swaps used to hedge the bank’s loan portfolio and debt securities, the Paris-based lender said in a statement today.
The bank’s tier 1 capital ratio, a key indicator of financial health, should be close to the 9.2 per cent it reported at the end of March, it said.
Société Générale has raised €3.4 billion in state funds, half in subordinated debt and half through preferred shares, to offset writedowns and trading losses.
The world’s largest financial companies have booked $1.47 trillion in writedowns and credit-related losses amid the worst financial crisis since the Great Depression, forcing them to raise $1.27 trillion in capital from governments and investors, according to data compiled by Bloomberg.
The bank’s stock has gained 5.3 per cent in Paris so far this year, giving it a market value of €22 billion.
Bloomberg