Société Générale experienced a sharp drop
profits in 2011 as a result of the eurozone crisis and, although
the damage was less severe, the leasing units were not immune.
Profit was down 13% in 2011 for Société
Générale’s Specialised Financial Services & Insurance division
which includes Equipment Finance and fleet services.
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Net income was down to €297m compared to €343m
for the year and the division experienced a 22.3% year-on-year drop
in income in the fourth quarter, down to €73m from €94m in
2010.
The drop in profit came despite an 85.6%
increase in operating income and a 29.4% drop in the cost of risk
for Specialised Financial Services. This was offset by a €200m loss
on goodwill.
The Equipment Finance and fleet leasing
services both experience revenue growth in 2011 with Equipment
Finance signing €7.8bn in new business over the year, a 4.6%
year-on-year increase, and the SG global fleet increasing 9% to
917,000.
The effect of the Greek sovereign debt crisis
contributed to a drop in Société Générale’s group profits which
took an 88.6% cut in the fourth quarter compared to the same period
in 2010.
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By GlobalDataGroup net income for the last three months of
2011 was €100m compared to €874m in 2010. The annual figure dropped
39.1% to €2.4bn last year compared to €3.9bn in 2010.
Similarly to BNP Paribas, Société Générale
devalued its Greek debt by 75%, writing off €662m.
Frédéric Oudéa, chairman and chief executive
of Société Générale, said: “Our overall exposure to the sovereign
debt of GIIPS countries [Greece, Italy, Ireland, Portugal, and
Spain] was reduced by approximately two-thirds.
“At the same time as making these operating
adjustments, the Group continued to play its role in financing the
economy by supporting its customers on a daily basis in the
different regions where it operates.”
He added the bank had achieved its objectives
of improving the structure of its balance sheet while strengthening
its franchises despite 2011 being an extremely turbulent year.
grant.collinson@vrlfinancialnews.com
