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SocGen Second-Quarter Profit Surges, Boosted by Capital Gain

Societe Generale, France's second biggest listed bank, reported a 32.7% rise in second-quarter net profit, beating forecasts as it benefited from the sale of shares in the Euronext bourse.

Net profit rose to 1.744 billion euros ($2.38 billion). This included a 235 million euro capital gain on the sale of Euronext shares after Euronext was acquired by NYSE Group, the operator
of the New York Stock Exchange.

The average forecast of 20 analysts for net profit was 1.385 billion euros. Most forecasts did not factor in the Euronext capital gain, but the result still beat expectations even after stripping out this capital gain.

Gross operating profit rose 26.4% to 2.81 billion euros while revenues rose 16% percent to 6.62 billion euros as SocGen also cashed in on higher investment banking profits and overseas takeovers that boosted its international retail banking arm.

SocGen's profit rise comes a day after larger French rival BNP Paribas reported a 20% increase in its second-quarter net profit.

Similar to BNP Paribas, SocGen said it had a low exposure to current credit market problems, which are related to concerns over U.S. home loan losses.

Current financial market volatility boosted trading profits at the investment banking divisions of both BNP Paribas and SocGen. On Thursday European rival Credit Suisse also said record investment banking earnings had driven an overall second-quarter group profit rise.

SocGen shares closed down 2.3% at 124.53 euros on Wednesday.

The shares reached a record high of 162 euros in April, buoyed by takeover talk linking SocGen to Italy's UniCredit.

However, the stock gave up its gains over the second quarter as the bid speculation faded and as concerns over the U.S housing market caused a slump in financial stocks.

Based on latest prices, SocGen shares have risen by 0.3% since the start of 2007, compared to a 4% fall in the DJ Stoxx European bank sector.

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