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(Updates with share price, analyst comment)
By Maya Nikolaeva
PARIS, Nov 6 (Reuters) - France's Societe Generale
raised its capital ratio on Wednesday, giving its shares a lift
despite a profit fall and some parts of its trading business
lagging rival banks.
SocGen shares were up 5% to 28.3 euros at 1102 GMT, making
the bank's stock one of the top performers on France's CAC40
index, as investors focused on progress in areas such as
the balance sheet.
"We have achieved results very much in line with our
objectives and priorities," Chief Executive Frederic Oudea said
in a statement as SocGen said its common-equity tier-one ratio
rose to 12.5% at the end of September.
SocGen said it had reduced risk-weighted assets, which will
allow it to use the funds to support business or to return them
to shareholders and reinforced its message that would pay 2019
dividends in cash, rather than paying "scrip" dividends.
Oudea is trying to improve the profitability of SocGen's
corporate and investment banking unit by exiting or shrinking
some businesses such as commodities trading.
That weighed on its third quarter net profit, which dropped
by a sharper-than-expected 34.8%, while SocGen also struggled to
perform in businesses it wants to keep, like equities trading.
SocGen said it had exited Serbia and Moldova and freed up
capital in corporate and investment banking faster than planned.
TRADING WEAKNESS
Quarterly revenue from trading financial instruments and
providing funding to investors fell by 7.6%, reflecting "the
first full quarter of lost revenue from business closures".
SocGen is exiting proprietary trading and is cutting back in
commodities trading and fixed-income prime brokerage.
It is focusing instead on businesses where it competes on
globally such as equity derivatives, where it ranked third in
2018, Coalition data showed.
But it struggled against some of its close rivals in Europe,
with its equity trading revenue dropping 20.1% as it cited low
currency volatility and volumes on the markets.
That compared to a 15% fall at BNP Paribas, while earnings
in this division rose at Barclays and Credit Suisse.
In fixed income, SocGen's trading revenue was up 1% in the
third quarter, while BNP Paribas, Barclays
and Credit Suisse reported strong gains.
Deputy Chief Executive Severin Cabannes said that despite
weaker results its corporate and investment bank kept its market
share over the first nine months of the year.
SocGen said its third-quarter net profit was 854 million
euros, down from 1.31 billion euros in the same period in 2018,
when results were boosted by a stake sale.
A Reuters survey of four analysts had on average expected
967 million euros.
($1 = 0.9030 euros)
(Reporting by Maya Nikolaeva, additional reporting by Laetitia
Volga; Editing by Sarah White and Alexander Smith)
