PARIS (AP) — Societe Generale, France’s second-largest bank, said Monday that its second quarter net income will be “slightly positive” thanks to its corporate and investment banking units.
The bank said its overall net income will be hit by a euro1.3 billion ($1.82 billion) writedown from credit default swaps and debt instruments. The global financial crisis has led to major losses on risky securities at banks worldwide.
“Solid operational performances, in particular in corporate and investment banking, will absorb the significant negative impact on the accounts of the substantial tightening of credit spreads stemming from an improving market environment and reduced aversion to risk since mid-March,” SocGen said.
The bank’s Tier 1 ratio, seen as a key measure of a bank’s financial health, should be “close to” the level reported at the end of the first quarter, 9.2 percent. Societe Generale said it is continuing to shed risky assets.
Societe Generale shares fell Monday, trading down 3.1 percent at euro36.72 in late morning Paris trading.
The Paris-based bank issues its quarterly results Aug. 5. It struggled to return to profitability last year after losing billions of euros in a massive trading scandal, and reported a net loss of euro278 million in the first quarter this year after devaluation of assets linked to U.S. real estate.
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