Societe Generale made progress toward recovery in the third quarter after suffering a heavy blow to earnings earlier in the year due to the pandemic, the CEO of France’s third-largest bank said Thursday.
Oudea said the bank is bouncing back as a result of the strength of its capital, increased efficiencies and savings from a potential merger of its two main banking brands. The bank is also projecting improvements in the economy in France and other developed economies.
SocGen’s second quarter was its worst since 2008. The Paris-based bank reported EUR 1.26 billion ($1.48 billion) in losses, resulting in changes in senior management and plans to cut EUR 450 million ($529 million) in expenses.
Oudea suggested those times were in the rearview mirror, with both the bank and the country climbing out of the pandemic-induced downturn. He said that SocGen will continue its strategy of maintaining its investment inventory while putting limits on new production, eventually landing at a “much better balance breakdown” between fixed income and equity-based revenue.
The CEO said the bank has a CET1 capital ratio of 12.6% and a liquid assets buffer of EUR 227 billion ($265 billion). Oudea also said that the bank would make further efficiency gains through job cuts and branch closings.
SocGen is examining a larger structural change of combining its two main banking branches, Societe Generale, which has around 7.3 million clients, and Credit du Nord, which has about 2.4 million clients and focuses mainly on retail and small business banking.
Though Oudea said the bank could lose customers who have positive associations with the Credit du Nord brand, he added the merger would save hundreds of millions of euros by streamlining operations and combining information technology systems.
--Additional reporting by Reece Wallace