SocGen CEO: Stress tests 'one point picture'

The economic environment is uncertain: SocGen CEO

Frederic Oudea, the chief executive of Societe Generale (SocGen), the French bank which performed worse than expected in important tests of financial strength, played down the tests' importance as the bank reported a rise in income fueled by the sale of VISA Europe.

SocGen shares rose by around 4 percent in early trading on Wednesday after the results were announced.

Oudea told CNBC Wednesday: "The stress tests need to be taken for what they are and not more than what they are. It's a one-point picture. What we are doing is further transforming the model and further increasing our core tier 1. I'm very confident we have a buffer above the minimum regulatory level, and we are going to further build that."

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The bank, one of France's largest, announced net income for the second quarter of 1.46 billion euros ($1.64 billion) on revenue of 6.98 billion euros, up 8.1 percent on a year ago. When the VISA sale was taken out, revenue was stable for the second quarter.

SocGen was one of the banks whose performance in the stress tests, which examined how banks would deal with a severe recession over the next couple of years, disappointed many expectations. Under the scenario used to measure financial strength, SocGen's core tier 1 ratio fell to 7.5 percent and its leverage ratio to 2.9 percent, below the 3 percent regulators usually require.

European bank shares have been hit by a combination of mediocre earnings and disappointment following Friday's stress test results.

Oudea remains positive for the second half of the year, despite the headwinds of negative interest rates and political uncertainty.

"I'm very confident in the dynamism of our businesses," he told CNBC.