Societe Generale sees loss on Newedge write-down

Societe Generale, France's second-largest bank, posted a fourth-quarter loss after writing down its stake in derivatives broker Newedge Group and setting aside €300 million (HK$3.13 billion) for legal expenses.

The net loss was €476 million, compared with a €100 million profit a year earlier.

The bank had goodwill write-downs of €392 million in the quarter, mostly on Newedge.

Societe Generale cut jobs and sold assets last year to cope with stricter international capital and liquidity rules after French banks had their access blocked to US dollar funding and European debt markets. The write-downs and litigation costs in the quarter offset a rebound in earnings at the corporate- and investment-banking unit, where the firm trimmed about 1,600 jobs after shuffling management.

The bank "succeeded, in a turbulent economic environment, in maintaining a good level of activity", chief executive officer Frederic Oudea said.

Societe Generale took a €300 million fourth-quarter charge on "litigation issues", it said, without giving further details. It also took a €686 million charge related to its own debt in the quarter. Banks book accounting charges or gains tied to the theoretical cost of buying back their own debt as market prices fluctuate.