SG’s profit soars €107

Un ex-collègue du trader Jérôme Kerviel, accusé d'avoir causé une perte de 4,9 milliards d'euros à la Société générale a été interpellé mercredi. /Photo prise le 30 janvier 2008/REUTERS/Benoît Tessier

Société Générale bagged a fourth-quarter net profit of 656 million euros ($740 million) for 2015, above the 549 million euros recorded in the same period last, has learnt.

The bank’s Board of Directors met on February 10, 2016 under the chairmanship of Lorenzo Bini Smaghi and examined the results for Q4 15 and the financial statements for 2015 in which Book Group net income amounted to EUR 4,001 million for 2015, vs. EUR 2,679 million in 2014.

If non-economic items are stripped out, Group net income increased 27.4% in 2015 vs. 2014. Group net income for Q4 15 was EUR 656 million (vs. EUR 549 million in Q4 14). Net banking income totalled EUR 25,639 million in 2015 (EUR 23,561 million in 2014) including EUR 6,053 million in Q4 (EUR 6,129 million in Q4 14).

If non-economic items are stripped off, it rose 4.0% in 2015, driven by the good commercial performance of all the businesses. Operating expenses remained under control, despite the increase in fiscal, regulatory, and legal costs, and the restructuring costs related to the Group’s new cost savings plan, SG said.

When corrected for these factors, the increase in operating expenses is contained at 1.4% in 2015. The Group’s commercial cost of risk reduced to 52 basis points in 2015 (down -9 basis points vs. 2014), reflecting the attention paid to monitoring risks and the quality of the portfolio. The net cost of risk amounted to EUR 3,065 million in 2015 vs. EUR 2,967 million in 2014.

It includes an additional provision of EUR -400 million in Q4 15 in respect of the provision for litigation issues, taking the total for this provision to EUR 1.7 billion.

The “Basel 3” Common Equity Tier 1 (fully-loaded CET1) ratio stood at 10.9% (3) (10.1% at end- 2014), with a target of maintaining a buffer of 100bp to 150bp above the regulatory minimum. The leverage ratio stood at 4.0% (vs. 3.8% at end-2014). These ratios already reached, at end-2015, the level expected at end-2016.

The total capital ratio stood at 16.3% at end-2015 (14.3% at end-2014), with a target of more than 18% at end-2017. Given the results for the year, the Board of Directors has decided to propose a dividend of EUR 2 in respect of 2015 (vs. EUR 1.20 in respect of 2014), corresponding to a 50% payout ratio (40% in 2014). The dividend will be detached on May 25th, 2016 and paid on May 27th, 2016.

Commenting on the Group’s results for 2015, Frédéric Oudéa – Chief Executive Officer – stated: “With Group net income of EUR 4 billion in 2015, substantially higher than in 2014, the Société Générale Group has successfully completed another stage in its transformation process. 2015 was marked by good operating performances in all the businesses and the strengthening of synergies between the businesses.

“Thanks to the trust shown by our customers and the commitment of our employees, the Group benefited from a strong commercial momentum. Revenue growth was buoyant, while maintaining rigorous management of risks and costs.

“The Group also continued to optimise its capital and invested in the acceleration of its digital transformation. Underpinned by a sound and robust balance sheet, CET 1 capital levels are already well above regulatory requirements. Finally, the good operating performance and this optimised capital management enable the Group to pay its shareholders a substantially higher dividend. In the unstable environment expected in 2016, the Société Générale Group, supported by a successful business model, will determinedly pursue its transformation plan in order to continue to provide its customers with added value and create value for its shareholders,” added Oudéa.


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