China slowdown not a surprise: SocGen CEO

Anmar Frangoul | Special to
SocGen CEO remains positive on the euro zone

China's recent slowdown is "not a surprise," Frederic Oudea, CEO of Societe Generale, told CNBC on Thursday.

"I think we personally saw early signs of slowdown in certain industrial sectors, in the property sector, at the beginning of this year, and I think it's more the macroeconomic situation which is important than the market turbulences as such," Oudea told CNBC's Carolin Roth in Frankfurt.

Eric Piermont | AFP | Getty Images

Oudea added that the complex transition of the Chinese economy, as well as the need to address overcapacity in certain sectors, might take some time.

"Going forward, first of all I think China can address the issue, second we don't think it will derail the progressive improvement in the euro zone economies on one hand and, secondly, the relatively robust growth that we see in the U.S.," he said.

Oudea's comments follow weeks of heightened volatility in global markets on concerns about China's economic outlook and uncertainty about a possible interest rate rise by the U.S. Federal Reserve.

In the U.S., stocks suffered their worst start to a September in 13 years, while fears over a slowdown in China's economy have been fuelled by weak data this week.

Commenting on market volatility and whether it was welcome, Oudea said that while a certain amount of volatility was helpful, stability was also needed to boost investor confidence.

"We are in this period of time where there is a question mark on the Fed decision. China: fundamentally I remain positive, as I've said, on the euro zone economy, and on the asset class of European equities."

France is not the sick man of Europe: SocGen CEO

With the European Central Bank (ECB) interest rate decision set to be announced later on Thursday, Oudea said that an extension of the current bond buying programme past September 2016 would not be welcome at this moment in time.

"Our central scenario is a moderate progressive improvement of gross domestic product (GDP) growth in euro zone areas, knowing that our scenario is slightly lower than the assumptions made by the European Commission or the ECB."

"Second, from a credit perspective, it is the first month where we see an increase of the credit provided to corporates for the full euro zone area, so it seems to me there is a clear improvement of the financing conditions: credit is flowing better at the lower rate. So I don't see a reason to intervene today and I don't think the market turbulences is enough to justify anything."

Oudea said that quantitative easing had been successful in limiting and reducing interest rates across the euro zone, helping banks to lend at lower rates.

"We have seen the improvement in countries like Spain and Italy with lower interest rates to the economy, and we've also the implementation of the banking union. With the strengthening of the banking system in Europe I think we see also banks which are more able to commit balance sheets."

Globally, Oudea said the risk to Societe Generale from Russia was, "very small," and "totally under control." He added that with regards to any interest rate decisions from the Federal Reserve, "the question whether there will be an increase in September, December, is not a big deal, it doesn't matter."

In August, Societe Generale reported a net income of 1.35 billion euros ($1.52 billion) for the second quarter of 2015, a 25 percent increase compared to the same period in 2014.