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(Bloomberg) — Societe Generale SA broadly beat analysts’ estimates in the third quarter, as its investment bankers profited from higher trading revenue and the French retail bank turned the corner.
Equities trading rose 10% from a year earlier and fixed income gained about 6%, SocGen said in a statement Thursday. Both were ahead of analysts estimates, even as the equities desk trailed Wall Street peers in a strong quarter for the business.
Revenue at the division that houses the domestic retail business increased 19%, and profit for the group surged more than fourfold from a year earlier, when SocGen wrote down the goodwill of various units.
The results may provide a boost for Chief Executive Officer Slawomir Krupa, who has struggled for more than a year to win over investors with a strategy focused on capital strength. He’s cut hundreds of jobs at SocGen’s Paris headquarters and sold units as he seeks to focus on the most profitable businesses. Interest rate hedges that had weighed on the French retail unit have since matured, removing a key hurdle.
SocGen saw “a strong rebound of the net interest income in France and another remarkable contribution from Global Banking and Investor Solutions,” the operating division that houses the investment bank, Krupa said in the statement.
Shares of SocGen have rebounded 18% from a low in early August, as signs mounted the worst for the French business may be over. They’re still down about 10% since Krupa unveiled his strategy in September of last year, making them the worst performer in an index of European lenders.
A former investment banker, Krupa a year ago scaled back revenue and profitability targets set by his predecessor, and guided for lower payouts to shareholders, as he focuses on boosting capital buffers and efficiency.
The CET1 ratio, a key measure of its financial strength, stood at 13.2% at the end of September. SocGen has said it expects the metric to be above 13% at the end of the year.
Krupa told investors in September that while capital remains the cornerstone of his strategy, anything above the target could eventually be used for other purposes, such as investments in growth or boosting shareholder returns.
The bank’s cost-to-income ratio, which the lender aims to bring below 71% for the year, was at 63.3% in the third quarter.
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