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SocGen off on good earns
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August 3, 2000: 9:15 a.m. ET
Retail growth drives profit but stock retreats sharply from record high
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LONDON (CNNfn) - French bank Société Générale S.A. reported Thursday that net profit rose 28 percent for the first half of the year, topping analysts' forecasts, but its shares were hit hard after hitting a record high Wednesday.
France's second-biggest bank said growth in its equity and retail banking operations offset weakness in currency and debt markets.
The Paris-based bank, which has made no bones about its expansionist desires, earned  1.64 billion ($1.5 billion) in the first half of the year, up from 1.28 billion in the first half of 1999. Analysts had anticipated earnings to come in at about 1.56 billion, according to a Reuters poll.
But investors sold out of Société Générale (PGLE) shares a day after they hit a new high in Paris trading. The stock was the biggest loser among CAC-40 components, off 6.7 percent, or 4.65, to 65.30. HSBC Securities cut its rating on the stock to "hold" from "add" after the earnings release. 
"The results on the operating profit side were some 5 percent below our target. That was possibly because of higher costs," Sarah Manton, an analyst at HSBC Securities, told CNNfn.com. "We reduced to a hold because the stock had nearly hit our target of 70."
Retail banking revenue rose 18 percent. KBC Securities analyst Pol-Louis Martin told Reuters he was pleased with the performance by the retail division but there was evidence investment bank profits slowed in the second quarter. KBC raised its target to 75 from 70 after the results.
SocGen suffered a 95 percent slump in profit from debt, currencies and commodities to 7 million, due to what the company called "difficult conditions on the fixed-income markets."
Société Générale last year failed to buy French rival Paribas, which was snatched up by BNP in a wrenching three-way takeover battle virtually unheard of in France's blue-blooded banking circles.
Separately, SocGen said it had been offered Commerzbank shares by the German bank's leading shareholder, CoBRa, but had not bought any.
"It's true that CoBRa has offered its shares, probably to lots of banks and also to Societe Generale," Societe Generale Chairman Daniel Bouton told a news conference. "Societe Generale has not bought any Commerzbank shares from CoBRa and has not bought any Commerzbank shares from other shareholders. We are not currently Commerzbank shareholders." 
-- from staff and wire reports
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Société Générale
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