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Societe Generale Books Fourth-Quarter Loss on Accounting Charge
02/13/2013| 01:15am US/Eastern
By Noemie Bisserbe
PARIS--French bank Societe Generale SA (GLE.FR, SCGLY) said Wednesday it will roll out a restructuring plan this year that will boost revenue, even as it posted a fourth-quarter loss hurt by an accounting charge.
The bank will "streamline and refocus the organisational structure around the core businesses in order to increase revenue and cost synergies," it said in a statement. "The details of this new organisational structure will be established over a period of time," the bank added.
The Paris-based lender, France's second-largest publicly listed bank by market capitalization, reported a 476 million euro net loss ($640 million) in the three months ended Dec. 31, compared to EUR100 million net profit last year, below analysts' expectations.
The loss, however, reflects an improvement in investor confidence, as the French bank works to distance itself from the sovereign debt crisis, despite weakening growth prospects in Europe.
Societe Generale booked a EUR686 million accounting charge stemming from a rule that requires banks to book a loss if the price of their own debt rises. It is tied to the theoretical cost of buying back its own debt as market prices fluctuate.
The bank also booked a EUR380 million write-down on the futures broker Newedge it jointly owns with French peer Credit Agricole SA (ACA.FR, CRARY).
Societe Generale said it made a provision for EUR300 million for litigation issues without disclosing further details.
Fourth-quarter revenue fell 15% to 5.13 billion euros, from 6.01 billion euros a year earlier.
The French bank said its core Tier 1 capital ratio--a key measure of its financial strength--stood at 10.7% under Basel 2.5 rules, a more-flexible reading of capital rules that is the precursor to the stricter Basel III regulations.
The bank said it remained confident it would meet its target of a Basel III core Tier 1 capital ratio of between 9% and 9.5% by the end of the year.
The Paris-based lender said it proposed to pay a EUR0.45 dividend per share, with a script dividend option.
Societe Generale is the first major French bank to report fourth-quarter earnings. BNP Paribas SA (BNP.FR, BNPQY), France's largest listed bank, will publish its fourth quarter results on Thursday, while Credit Agricole will report on Feb. 20.
Write to Noemie Bisserbe at
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