LONDON (ShareCast) - (Sharecast News) - French banking giant Societe Generale beat expectations on its reported third-quarter net earnings on Friday, which came in at €1.5bn - well ahead of the €1bn analysts had pencilled in.
The company said revenues were up 2.3% year-on-year, driven by the resilience of its French retail banking operation, strong growth in international retail banking, as well as in financial services, with a "robust" performance from global markets, and financing and advisory.

SocGen said it maintained "good" cost control in the period, with a "limited" 1.5% increase in operating expenses on a published basis, year-on-year, and 2% underlying.

It also recorded an improvement in its underlying cost-to-income ratio, excluding contribution to the single resolution fund, at 60.7%, compared to 61.8% in the third quarter of 2021.

The bank's cost of risk was contained at 31 basis points, with around two-thirds consisting of "prudent provisioning" on performing loans, as the level of defaults remained low at around 10 basis points.

Underlying group net income was €1.4bn, while underlying profitability was 10.5%, or 11.2% on a reported basis.

SocGen also reported an improved capital position, with its CET1 ratio standing at 13.1% at the end of September - up 13 basis points compared to the end of June, and around 380 basis points above the regulatory requirement.

"In an increasingly complex geopolitical and economic environment, Societe Generale posts, once again, excellent results, with both a very solid commercial performance and profitability," said group chief executive officer Fréderic Oudéa.

"The third quarter is marked by increasing revenues, continued control of operating expenses and a contained cost of risk, while maintaining a prudent provisioning policy.

"We continue to make good progress on the execution of our strategic initiatives, with several major milestones achieved, notably on the merger of the retail banking networks in France and the finalisation of the partnership between Boursorama and ING."

Oudéa said that furthermore, on 30 September, the board decided that at the next general meeting it would propose Slawomir Krupa as board member to be his successor as CEO in May.

"The coming months will enable us to continue to implement the strategic initiatives underway, which would ensure sustainable growth and profitability, while together ensuring an effective and orderly transition."

At 1219 CET (1119 GMT), shares in Societe Generale were up 5.43% in Paris, at €24.78.

Reporting by Josh White for Sharecast.com.

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