The French firm saw a reduction in its operating expenses as all of its business divisions saw substantially lower costs
French banking giant Societe Generale has reported a net loss of €1.26bn for the second quarter of this year, due to heavy impact from Covid-19 global health crisis and its economic consequences.
Its net banking income was €5.3bn, which was down by -15.7% compared to €6.3bn for last year’s Q2.
For the first half of this year, net banking income was €10.5bn, which was also down by -16.1% compared to €12.5bn for last year’s H1.
The bank reported a reduction in it operating expenses from €4.3bn in last year’s Q2 to €3.8bn in the second quarter of 2020.
Societe Generale said that all the businesses witnessed substantially lower costs, with its Global Banking & Investor Solutions recording an 18% decline.
The bank’s net cost of risk for the Q2 stood at €1.27bn, increasing from €314m in the corresponding quarter last year. In the first half of this year, it has also increased 3.6x times to €2.09bn from €578m in the same period last year.
Societe Generale saw rebound in French retail banking activities from mid-May
Societe Generale said that its French retail banking and international retail banking activities were impacted by the Covid-19 crisis in the first half of the second quarter.
However, it noted a rebound from mid-May in the two divisions and resilient activities in insurance, private banking and transaction banking.
Its retail banking division earned a net banking income of €1.7bn for the quarter, down 12% from €1.99bn for last year’s corresponding period.
Under the international retail banking and financial services head, its net banking income for Q2 declined by 17.6% from €2.1bn to €1.7bn on a year-on-year basis.
Societe Generale’s global banking and investor solutions reported a net banking income of €1.88bn for Q2, compared to €2.3bn in last year’s Q2.
Its corporate centre made a net banking loss of €88m in the second quarter of 2020.
Societe Generale Group, CEO Frédéric Oudéa said: “During the first half of 2020, Societe Generale successfully adapted to the consequences of the health crisis and was therefore able to effectively support its customers and employees, thereby strengthening its position as a trusted partner. While April and May were heavily impacted by the reduction in activity of numerous economies around the world, the rebound in activities from mid-May is very encouraging.
“Drawing on a very solid capital base and a loan portfolio confirming its intrinsic quality, the Group will continue to adapt its activities to the new post-COVID crisis environment, extending in particular the efforts to reduce costs. The Group is already working on new initiatives to build its next strategic stage (2021-2023) focused around three priority objectives, customer centricity, corporate social responsibility and operational efficiency based on digital technologies.”