SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop
The chief executive of Societe Generale, France's second-biggest bank, blamed an 86 percent drop in net profits on accounting rules.
"Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues," Frederic Oudea told CNBC in Paris.
SocGen's third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts' mean estimate of 139.1 million euros.
Revenues, down 17 percent to 5.4 billion euros, were also lower than forecasts.
The CEO also warned that there was no prospect of a "big change" to sluggish global growth.
Oudea said the fiscal cliff in the U.S., the slowdown in emerging markets and "relatively sluggish" recovery in Europe would hamper growth.
And he said a turnaround for Europe's economy would take time.
"It will take some time before structural reforms deliver results."
One bright spot in SocGen's results was the performance of its corporate and investment bank (CIB), where trading revenues rose after a large-scale restructuring.
"CIB has really delivered. They are really delivering after the restructuring plan so we see that the rebound is there," Oudea said.
Written by Catherine Boyle, CNBC.com. Twitter: @cboylecnbc.