8.10 AM Saturday, 22 June 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 03:59 05:26 12:24 15:44 19:15 20:42
22 June 2024

SocGen posts record Q4 loss after trading hit

By Agencies

Société Générale, France's second biggest listed bank, posted a record fourth-quarter loss, in line with its forecast after earnings were hit by its previously announced $7-billion (Dh25.7bn) trading loss.

The bank made a fourth-quarter net loss of $4.93 billion, which compared with a €1.18 billion (Dh19.8bn) profit in the fourth quarter of 2006. SocGen had already forecast this loss last month.

The 2007 dividend fell to 0.90 euros from 5.20 euros a year earlier.

On January 24, SocGen announced €4.9 billion of losses, which it blamed on rogue deals carried out by Jerome Kerviel, a 31-year-old junior trader at the bank.

SocGen is the latest leading bank to post weak results as the world's financial sector reels from losses related to US sub-prime mortgages.

Earlier this month, UBS posted a fourth quarter net loss of CHF12.45 billion (Dh42bn) while US banks Merrill Lynch and Citigroup both reported fourth-quarter net losses of $9.8 billion in January.

On Wednesday, France's biggest listed bank BNP Paribas, which many analysts say could bid for SocGen, reported a 42 per cent fall in its fourth-quarter net profit.

SocGen is in the process of raising €5.5 billion from a rights issue that has been fully underwritten by investment banks JP Morgan and Morgan Stanley.

SocGen said on Thursday that it would continue with a share buyback program to counter the dilutive effects of the rights issue.

SocGen shares closed 6 per cent lower at €71.15 on Wednesday, giving the bank a market capitalisation of about €33 billion.

The stock is down nearly 30 per cent since the start of 2008, compared with an 18 per cent fall in the DJ Stoxx European bank sector . SocGen shares dropped 23 per cent in 2007. (Reuters)