PARIS (Reuters) - Societe Generale (SOGN.PA) will adapt its business to the conditions created by the coronavirus crisis and to ensure it changes the market view on the French bank’s financial path, its Chief Executive Frederic Oudea said.
SocGen surprised investors with a first quarter loss, as it hiked provisions for bad loans and its revenue was wiped out at its equity trading division due to the coronavirus crisis. Its share price has fallen sharply and was trading at 12.4 euros on Tuesday, down from 31.1 euros at the start of 2020.
“The share price absolutely does not reflect the intrinsic value of our assets and we will be working hard in the coming quarters to show the market that it is too pessimistic,” the bank said in a written response to a shareholder’s question. “Our priority is to provide, quarter after quarter, the right responses to adapt our businesses to the new context created by the crisis,” Oudea said during SocGen’s annual meeting, which it held online because of the pandemic.
The bank also told shareholders that it had launched a review of its structured products business linked to the debt tranches of North American companies, which suffered during the first quarter. Oudea, chief executive since 2009, has reinforced the bank’s balance sheet by selling non-core assets and exited or cut back some corporate and investment banking activities, such as commodities trading. The quarterly loss showed SocGen struggling to perform in businesses it wants to keep, such as equities trading, in a blow to Oudea’s efforts to boost its profitability. SocGen’s board has full confidence in Oudea and the top management to steer the bank through the current crisis, the bank said in a written response to a shareholder’s question.
Reporting by Maya Nikolaeva; Editing by Alexander Smith