Socié té Gé né rale Boosted by Retail Banking

PARIS—Socié té Gé né rale SA on Thursday reported a jump in third-quarter net profit, lifted by an accounting gain and improved income from its retail banking business, as France chugs toward economic recovery.

The Paris-based lender, France's third-largest listed bank by assets, said net profit rose 28% to €1.13 billion ($1.23 billion) in the three months through September, from €882 million a year earlier.

It booked a €447 million gain because of an accounting rule that permits banks to post paper profit when the value of their own credit declines.

Revenue increased by 8% to €6.36 billion from €5.88 billion in the same period last year.

Socié té Gé né rale's third-quarter earnings reflect an uptick in loan demand in France, as the country's economy progressively recovers from back to back crises.

Its retail bank in France posted net profit of €410 million, up 29% from the same quarter last year.

However, market volatility, fueled by investors' concerns over slower economic growth in China, pushed net profit for its global banking and investor solution business 30% lower to €320 million in the third-quarter.

In Russia, where Socié té Gé né rale is struggling with a difficult economy and continuing economic sanctions, the bank posted a €20 million third-quarter loss. Socié té Gé né rale owns one of the country's largest private lenders, Rosbank.

Total revenue growth helped the bank continue to raise its capital cushions to meet tighter regulation.

Socié té Gé né rale's core tier-one ratio, which compares top quality capital such as equity and retained earnings with risk-weighted assets, stood at 10.5%, up from 10.4% at the end of June.

Socié té Gé né rale said it is still targeting a core tier-one ratio of close to 11% by the end of 2016.

The bank's leverage ratio, which measures capital held by the bank against its total assets, rose to 3.9%, from 3.8% at the end of June.

Write to Noemie Bisserbe at [e-mail]

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November 05, 2015 01:45 ET (06:45 GMT)

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