SOCIÉTÉ GÉNÉRALE, France’s second-biggest bank, yesterday put its Russian expansion plans on hold and wrote down some Russian assets but insisted it remained confident about the outlook for eastern Europe.
Growing concern about the health of economies in eastern Europe have hammered shares in the bank, which has more exposure to the region than other French banks. It has a majority stake in Rosbank, the Russian bank, and owns the Czech Republic’s third-largest consumer banking network as well as Romania’s second-biggest bank.
Shares in SocGen have fallen 35 per cent since January, underperforming the FTSE Eurofirst Banks index by 14 per cent.
The other French banks have all outperformed the index. It clawed back some of the losses yesterday, closing 2.7 per cent higher.
SocGen took a €300 million goodwill writedown on its Russian operations in its 2008 accounts, compared with a total goodwill of €1.1 billion on Rosbank. It also made a €92 million currency loss in the Ukraine.
These contributed to an 11 per cent decline in international retail banking net income to €609 million in the year to December 31st.
Frédéric Oudéa, chief executive, said the writedown was a prudent measure reflecting “the less buoyant environment”. While the “economic crisis” in Russia would probably force SocGen to delay expansion there, he saw “significant potential” in the country.
SocGen reported full-year net income of €2 billion, up from €947 million in 2007 – the year in which it booked a net loss of €4.9 billion as a result of alleged unauthorised trading by Jérôme Kerviel.
