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French bank 4th qtr earnings hammered by Greece

French bank 4th qtr earnings hammered by Greece

February 16th, 2012 in News

PARIS (AP) - French bank Societe Generale said Thursday its fourth-quarter earnings plummeted after it took a half-billion euro hit as Europe's intensifying financial crisis slashed the value of its holdings of Greek government bonds.

The Paris bank reported a net profit of (euro) 100 million ($131 million) for the three months ending Dec. 31, down from (euro) 874 million a year earlier and well below market expectations of about (euro) 258 million.

The bank said in a statement Thursday its quarterly earnings were saddled with a (euro) 622 million write-down on its Greek government bonds, which the bank said it now has discounted by 75 percent, up from 60 percent in the third quarter to match French banking rival BNP Paribas, and in line with terms of an expected restructuring of Greece's debt.

Chief Executive Frederic Oudea gave no guidance for 2012 earnings but said in a statement he's "confident of the group's ability to continue to expand ... in a sound and sustainable manner" despite the impact of Europe's financial crisis.

The bank's once high-flying corporate and investment banking division lost nearly half-a-billion euros in the fourth quarter, which the bank blamed on uncertainty, investor risk aversion and the liquidity crisis on world markets as Europe's financial crisis spiraled last autumn.