The banking group swung into the red in the first quarter due to rising provisions linked to the expected economic impact of the global pandemic. It did, however, report a net inflow to its private banking arm.
French banking group Societe Generale
has set aside billions of euros to deal with expected
coronavirus-related costs, resulting in a reported first-quarter
2020 net loss of €326 million ($357.3 million), contrasting with
a €686 million net income result a year ago.
The Paris-based lender said its net cost of risk stood at €820 million in Q1, against €264 million a year ago. Underlying net income was €98 million in Q1, down from €1.065 billion in the same quarter of 2019.
SocGen confirmed its ambition to cut operating costs for this year compared with the levels of 2019, excluding one-off items. It intends to bring in further cost cuts this year, targeting reductions of between €600 million and €700 million net of the added costs linked to managing the COVID-19 pandemic.
The private banking arm of the group logged a net inflow of €1.0 billion, boosted by business in France. Falling markets during the quarter depressed assets under management by 6 per cent from their level at the end of December last year, at €111 billion. When certain adjustments are taken into account, net banking income at the private bank rose by 4.1 per cent year-on-year to €176 million.
Lyxor’s assets under management slumped by 15.2 per cent from the end of December 2019, at €126 billion, as tumbling markets took their toll in March.