French banking group Société Générale has published net income of €814m for the first quarter of 2021, against a loss of €326m a year earlier.
The performance was driven by a rebound in trading activities and by a drop in provisions set aside to absorb the shock of the health crisis.
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After rising sharply in 2020, the cost of risk, which reflects provisions for bad debts, fell to 21 basis points of outstanding loans, from 65 basis points a year earlier.
Underlying net income increased more than tenfold over the period to € 1.3bn.
Over the year as a whole, the bank confirmed that it was counting on an increase in its revenues greater than that of its costs and specified that it expected a cost of risk of between 30 and 35 basis points, against 64 points of base in 2020.
French retail banking: best quarter since 2015
Net banking income (NBI), the balance between bank operating revenues and expenses, increased by 21% in the past quarter, to 6.25 billion euros. Organic growth stands at 25%.
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By GlobalDataAnalysts had forecast, on average, quarterly net income of €156m and NBI of €5.92bn, according to the FactSet consensus.
In French retail banking operations, revenues fell 2.4% to €1.86bn, held back by low interest rates and continued health restrictions. The division also suffered in comparison to a first quarter of 2020 little marked by the coronavirus crisis.
The retail banking and international financial services division remained stable over the quarter, after mixed performances by business line. Financial services, however, posted growth of 7.9%.
Main factor in the improvement of the group’s results, the corporate and investment bank saw its revenues rebound by 60% to €2.51bn, benefiting from a normalisation of market conditions compared to the beginning of 2020.
The underlying result of the division, whose strategy will be the subject of a presentation next week, amounted to €646m.
Trading income doubled in a year
Revenues from trading activities more than doubled over one year and the equities segment had its best quarter since 2015, said Société Générale. Fixed income and foreign exchange products also rebounded 51% compared to the fourth quarter of 2020.
Corporate finance and advisory banking, on the other hand, posted more modest organic growth of 2.9% year-on-year, while private banking contracted 1.7%.
At the end of March, Société Générale’s CET1 capital ratio rose slightly, to 13.5%, or about 450 basis points above the regulatory requirement, the group also said.
