Business

Societe Generale profits hit by Greek debt writedown

  • 3 August 2011
  • From the section Business
Societe General offices
Societe Generale is France's second-biggest bank

Second-quarter profits at Societe Generale, France's second-biggest bank, have fallen as a result of its exposure to Greek sovereign debt.

SocGen's net profit for the quarter fell to 747m euros ($1.06bn; £652m), down 31% from a year ago.

It made a 395m euro writedown on its Greek debt holdings. The bank holds about 2.65bn euros of Greek sovereign bonds.

SocGen also warned that its 2012 profit target would be "difficult to achieve".

In a statement, the bank said that the second quarter results reflected the global economic and financial situation, which remained very mixed.

Frederic Oudea, the group's chairman and chief executive, said, "The Q2 results testify to the Group's resilience in an uncertain economic environment."

On Tuesday, BNP Paribas, which has the biggest exposure to Greek debt among France's banks, announced that it was setting aside 534m euros to cover its expected Greek losses.

French banks are among the biggest holders of Greek debt and were involved in the negotiations of a second bailout for the country, which included private sector support.

Banks could end up taking a loss of 21% on the value of their Greek debt as a result of the bailout.

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