Societe Generale, the French lender, has reported a decline in earnings for the third quarter of this year. This was primarily due to a decrease in net interest revenues, an increase in costs, and exceptional items impacting the bank’s results.
The net profit for Q3 was EUR 295 million ($313.3 million), compared to EUR 1.45 billion in the same period last year. Additionally, revenue declined by 6.2% to EUR 6.2 billion.
This performance fell short of analyst expectations, who were anticipating quarterly profit of EUR 225 million and revenue of EUR 6.3 billion, according to FactSet.
Factors impacting Revenue
Societe Generale attributed the decline in revenue to a decrease in net interest income across its French retail, private banking, and insurance divisions.
Outlook and Future Plans
The bank stated that it expects the net interest income for its French retail banking, Private Banking, and Insurance divisions to decrease by more than 20% in 2023 based on current economic assumptions. However, it is hopeful that next year’s net interest income will either match or exceed the levels achieved in 2022.
Increase in Expenses
Expenses during the reporting period totaled EUR 4.36 billion, indicating a 6.8% increase compared to the previous year.
Exceptional Items Impact
Societe Generale’s results for the quarter were also affected by EUR 610 million worth of exceptional items.
Financial Strength and Cost of Risk
The bank’s common equity Tier 1 ratio, which measures its financial strength, stood at 13.3% at the end of September. Additionally, the cost of risk amounted to EUR 316 million.