×

Societe Generale reports 15% drop in profits, prepares for US legal battles

  • Societe Generale has been embroiled in legal battles over allegations of interest-rate manipulation
  • The bank has increased the buffer for litigation costs by 300 million euros ($350 million)

Societe Generale reported a 15 percent drop in net income during the third quarter of the year, as it prepared to resolve two legal disputes in the U.S. The shares fell 4 percent in early trade.

Here are some of the key metrics:

  • Net banking income: 932 million euros ($1.087 million), vs 1.042 billion euros expected in a Reuters poll
  • Earnings per share: 3.12 euros for first nine months of the year, versus 4.19 euros a year ago

Speaking to CNBC on Friday, Frédéric Oudéa, the bank's chief executive officer, said that the low interest rate environment poses a challenge to the bank's books.

"We are still penalized by the low rate environment," Oudéa said, but "going forward, in particular in light of a progressive accommodation of the monetary policies by the central bank in Europe, we should see then a better revenue outlook."

SOCGEN EARNS
Jean-Claude Coutausse | Bloomberg via Getty Images

The European Central Bank announced last month that it will reduce its monetary stimulus starting next year. Though the bank kept interest rates unchanged, the decision signaled that the ECB sees an improved economic environment in the euro zone following the financial crisis.

Oudéa told CNBC that the better economic environment in France, as well as across the euro zone, along with good credit volumes, are good indicators of future growth for the bank.

Societe Generale has been embroiled in legal battles over allegations of interest-rate manipulation. The bank has increased the buffer for litigation costs by 300 million euros.

"We've decided to complement the provisioning; we hope to find a resolution of these two disputes in the coming weeks or in the coming months," Oudéa told CNBC.