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SocGen's Q2 net income drops 27.6% YOY

Société Générale SA reported second-quarter group net income of €1.06 billion, down 27.6% from €1.46 billion in the year-ago period.

Group net banking income amounted to €5.20 billion for the second quarter, down 25.6% from €6.98 billion a year ago. Net banking income includes the impact of the Libyan Investment Authority settlement for a loss of €963 million in the second quarter of 2017 and the impact of the sale of Visa shares for a gain of €725 million in the second quarter of 2016.

Group net income from French retail banking declined on a yearly basis to €359 million from €403 million. The international retail banking and financial services division recorded group net income of €568 million, up from €436 million a year earlier.

Global banking and investor solutions posted a year-over-year increase in second-quarter group net income to €499 million from €448 million. The corporate center division had a net loss of €368 million, compared to a year-ago net income of €174 million.

SocGen booked a positive net cost of risk of €259 million, compared to a net cost of risk of €664 million a year ago. Net cost of risk included a net write-back of €450 million in respect of the provision for disputes, which SocGen noted was the subject of a net write-back in the income statement of €450 million consisting of a write-back of €750 million intended to cover, in group net income, the impact of the settlement with the Libyan Investment Authority, and an additional allocation of €300 million.

After-tax return on equity stood at 7.1%, compared to 11.0% in the second quarter of 2016.

For the first half, the French lender posted group net income of €1.81 billion, down 24.3% from the year-ago €2.39 billion. Net banking income dropped on a yearly basis to €11.67 billion from €13.16 billion. EPS declined year over year to €1.94 from €2.71.

As of June 30, SocGen's group common equity Tier 1 ratio, on a fully loaded basis, stood at 11.7%, compared to 11.6% at March-end and 11.5% at Dec. 31, 2016.

The bank's leverage ratio was 4.2% at June 30, compared to 4.1% at March-end and 4.2% at the end of 2016.