Société Générale SA is expecting to reach an agreement with U.S. and French authorities over two outstanding legal issues in the coming days, its CEO said May 23.
"We are in very active discussions with these authorities with the aim of reaching an agreement in the coming days now," CEO Frédéric Oudéa told the bank's shareholders' meeting in Paris. The bank has set aside €1 billion to cover the suits, and Oudéa said the provisions were sufficient.
SocGen has a total of three legal actions outstanding with U.S. authorities and has provisioned a total of €2.32 billion for them. Investors have been concerned about exactly when the bank would reach a settlement.
Oudéa said the bank was in discussions on a settlement related to the rigging of benchmark interest rates with the U.S. Department of Justice and the Commodity Futures Trading Commission, and another settlement on transactions with the Libyan Investment Authority, also with the Department of Justice and France's National Financial Prosecutor.
SocGen has another legal claim outstanding in the U.S. over alleged sanctions busting in several countries including Iran, and Oudéa reiterated previous comments he hoped to settle that particular case in the coming weeks and months.
SocGen's shares have underperformed the rest of the European market during the period the cases have hung over the lender. On May 23, the bank's shares closed 17.54% lower than their close May 23, 2017, while the STOXX Europe 600 Banks Index climbed 0.18% over the same period.
Responding to shareholder questions about the cases, Oudéa said the bank was about to draw a line under its legal troubles.
"There are no new litigations [sic]. This is fundamental," he said, adding that the three cases had been going on for several years, and the lender was trying to find the best outcome for the bank and its shareholders.
SocGen is targeting a return on tangible equity — a key profitability ratio — of 11.5% by 2020, and Oudéa said while the bank still "had a bit of work to do," he was confident that the bank would reach its target. The bank had a return on tangible equity of 10.9% at the end of the first quarter.
