Société Générale expects the market environment to remain challenging throughout 2009 as the French bank posted fourth-quarter profits that came in below market expectations.
Quarterly net profit of €87 million ($110 million) was below analysts' average forecast for €122 million, but rebounded from a loss of €3.35 billion a year earlier when the bank was hit by a €4.9 billion trading loss blamed on rogue deals by Jerome Kerviel, a former SocGen junior trader.
The bank had reported a third-quarter net profit of €183 million.
The result compares favourably with many rival banks that have posted large losses as a result of the global financial crisis.
Earlier this month, Swiss banks UBS and Credit Suisse posted losses of 8 billion and 6 billion Swiss francs, respectively, while Britain's Lloyds Banking Group unveiled an £8.5 billion loss at its HBOS unit.
However, SocGen's shares have fallen recently on fears about its exposure to rapidly-slowing eastern European economies.
SocGen said it booked a €300 million goodwill impairment on its Russian operations, adding it would postpone its business plan for Russia.
It will also restructure its corporate and investment banking division.
"The environment will probably remain challenging throughout 2009," SocGen said in a statement.
SocGen proposed a dividend of €1.2 per share - a third higher than last year. It said it entered 2009 with a solid capital position and unveiled a Tier-1 ratio of 8.8 per cent.
SocGen shares closed down 9.6 per cent at €22.75 yesterday, valuing the bank at around €13 billion. The stock has fallen 37 per cent so far in 2009, compared to a 22 per cent fall in the DJ Stoxx European bank sector.
Reuters