Societe Generale, Credit Agricole Stock Up On Higher Q2 Results

(RTTNews) - Shares of Societe Generale SA (SCGLF.PK, SCGLY.PK) and Credit Agricole SA (CRARF.PK, CDA.L, ACA) were gaining in the morning trading in Paris after the French lenders reported Wednesday higher profit in their respective second quarters. Revenues also were higher, despite challenging economic environment for banking activities.

Societe Generale's second-quarter Group net income increased 8.1 percent to 1.46 billion euros from 1.35 billion euros a year ago. Group net income excluding non-economic items was 1.60 billion euros, compared to 1.14 billion euros a year ago.

The results reflected the increased earnings of International Retail Banking & Financial Services as well as the recording of the capital gain on the disposal of Visa Inc. shares.

In the quarter, core business net income declined 11.1 percent to 1.29 billion euros mainly on weak profit from French retail banking and Global banking and Investor Solutions.

Net banking income totaled 6.984 billion euros, 1.7 percent higher than 6.67 billion euros a year ago. At constant currency, net banking income grew 3 percent. Net banking income excluding non-economic items was 7.2 billion euros, compared to 6.5 billion euros last year.

The bank said it benefited from a substantially higher contribution from Retail Banking despite a low interest rate environment and unstable markets.

For Credit Agricole Group, comprising Crédit Agricole S.A. and 100 percent of the Regional Banks, reported net income Group share was 1.94 billion euros in the second quarter, up 29.5 percent from 1.50 billion euros in 2015. The result was boosted by the VISA disposal gain, which amounted to 337 million euros. Underlying net income Group share was 1.62 billion euros, down 1.5 percent from last year.

Credit Agricole S.A.'s net income Group share totaled 1.16 billion euros, a 25.8 percent increase from last year. Underlying earnings were 818 million euros, a 13 percent increase on the second quarter of 2015. The Regional Banks' net income Group share was 780 million euros, down 3.8 percent year-on-year.

Crédit Agricole Group recorded revenues of 8.27 billion euros, or 7.90 billion euros on an underlying basis, down 0.6 percent compared to the second quarter of 2015. Crédit Agricole S.A. reported revenues of 4.74 billion euros. Underlying revenue was 4.34 billion euros, up 0.5 percent year-over-year.

The Regional Banks' business revenues were stable, with the increase in fees and commissions revenues offsetting the decrease in the net interest margin.

"This good quarterly performance was driven by solid business momentum in all business lines, the robustness of our business model in an environment of very low interest rates, and the prudent risk profile of all our business lines, which is reflected in a continued low cost of risk, despite the political and economic environment," the company said in its statement.

In Paris, Societe Generale shares were trading at 29.43 euros, up 3.21 percent, and Credit Agricole shares were trading at 7.77 euros, up 2.37 percent.