Jaws in international waters helps SocGen net profit

business August 02, 2018 15:45

By Agence France-Presse
Paris

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Profits at Societe Generale were buoyed by growth abroad, as results released Thursday showed the French bank continues to pressed by ultra low interest rates at home in the eurozone.



Net profit rose by 9.3 percent compared to the second quarter last year to 1.15 billion euros ($1.3 billion).

This was mainly due what the bank called the "positive jaws effect in international retail banking & financial services".

In finance, a positive jaws effect is when income grows at a faster rate than expenses, indicating profitability of a business.

Net banking income jumped by nearly a quarter to 6.45 billion euros, but once a charge of 963 million euros to settle litigation with the Libya's sovereign wealth fund is excluded from last year's results the progression is just 1 percent.

The bank, which is caught up in around a dozen probes and lawsuits, said Thursday it was in active negotiations about resolving a US investigation into embargo violations and which could be resolved in coming weeks.

In France, Societe Generale's retail bank continues to feel the effects of the eurozone's ultra low interest rates, which has depressed income from lending operations as homeowners renegotiate mortgages.

It noted progress at its internet bank, Boursorama, which passed the 1.5 million client mark and is the largest online bank in France.

The bank's shares shed 1.5 percent in mid-morning trading in Paris, where the blue chip CAC 40 index was down 0.3 percent.