Société Générale saw profits beat expectations in the third quarter after booking a large capital gain on its stake in Euroclear, one of the world’s largest securities depositories.
The French lender recorded a 32 per cent increase in net profits to €1.23bn, ahead of the €917m expected by analysts according to Refinitiv data. The revaluation of Euroclear gave the bank a €271m boost.
The group also saw revenues beat expectations, rising 9.6 per cent during the quarter to €6.53bn.
SocGen put the gains, outside of the Euroclear revaluation, down to a strong performance by international retail and financial services, a rebound in global markets and a “strong momentum in financing and advisory.”
Revenues from equities and prime services were up 19 per cent “due primarily to the good performance in the United States and in structured products,” while revenues from fixed income, currencies and commodities trading were stable. French Retail Banking revenues rose 1.8 per cent.
SocGen also added €136m to its provisions for disputes, which totalled €1.58bn at the end of September. The bank added that the “expected financial cost of the future settlement of the US Sanctions Case is fully covered.”
Fréderic Oudéa, chief executive in a statement on Thursday:
“The group put an end this quarter to the financial impact of the major litigation issues with the US authorities relating to the pre-financial crisis period.”
The lender said in early September it had entered into “a phase of more active discussions” with US authorities over allegations of sanctions violations and could reach an agreement in the “coming weeks”.
SocGen had already agreed to pay more than $1.3bn to US and French authorities to settle charges relating to a bribery scheme involving the Libyan Investment Authority and manipulation of the Libor benchmark interest rate that saw deputy chief executive Didier Valet leave the bank.
The bank’s common equity tier 1 ratio stood at 11.2 per cent, up 8 basis points from the end of June.
Two of SocGen’s big French rivals, BNP Paribas and Crédit Agricole, have already recorded large falls in their quarter three FICC trading revenues.