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SocGen trims costs as profit surprises

Wednesday, May 04, 2016 - 01:20

Societe Generale is the latest bank to pledge further cost cuts this year. As Sara Hemrajani reports, it's seeking to reassure investors that its diversified business can withstand a weak start to the year in investment banking.

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A leaner, more streamlined bank. That's what SocGen is aiming for, as the French lender revealed its latest results. While analysts were expecting an income drop, profit actually rose 6.5 percent between January and March. But a weak start to the year in investment banking has triggered another round of cuts. SocGen says it will axe a further quarter of a billion dollars worth of costs. Still, the lender's diversified business could reap rewards, with international retail operations performing well and the euro zone economy now above pre-crisis levels. SOUNDBITE: Simon French, Panmure Gordon chief economist, saying (English): "I think SocGen can certainly look at recent European Union macro data as a sign that that extraordinary monetary policy from the ECB is starting to loosen credit conditions, starting to encourage slightly better economic sentiment, which can materially feed through to the bottom line in terms of their bad loans ratio, non-performing loans and indeed the appetite." Meanwhile it's more pain for Credit Suisse. The Swiss bank says it will take an additional $100 million writedown. That's as part of the sale of assets in its distressed portfolio to a U.S. investment firm. Most of that charge will appear in Credit Suisse's first quarter earnings, which are due on Tuesday.

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SocGen trims costs as profit surprises

Wednesday, May 04, 2016 - 01:20