Societe Generale warns on outlook after net profits surge

Updated 11 February 2016
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Societe Generale warns on outlook after net profits surge

PARIS: French bank Societe Generale has reported net profits rose almost 50 percent last year, but its chief executive still felt compelled to calm nervous investors about the road ahead.
Net profit in 2015 surged to 4.0 billion euros ($4.5 billion) in 2015, exceeding analysts expectations, but France’s second-largest bank warned it would fall short of its target for a 10-percent return on equity this year due to tighter regulations and a difficult economic environment.
The board expects to offer a dividend of two euros per share at the next annual general meeting in May, sharply higher from the 1.20 euros it paid out the previous year.
The size of dividends is often seen as a sign of management confidence, but the uncertain earnings outlook still sent the bank’s shares plunging more than 9.0 percent to 28.4 euros at one point in early Paris trading Thursday, on a CAC-40 that opened down more than 3 percent.
Societe Generale stock regained ground to trade around 3.8 percent lower in later morning trading.
Chief executive Frederic Oudea tried to reassure investors, saying the rise in profits showed the bank had “successfully completed another stage in its transformation process.”
“2015 was marked by good operating performances in all the businesses and the strengthening of synergies between the businesses,” he said in a statement.
But in a French radio interview, Oudea complained that efforts to introduce more regulation were scaring off investors, and called for an end to more rules.
“We absolutely need that (process) to be completed, because at the moment, uncertainty is weighing on strategy,” he told Radio Classique.
Such uncertainty is “extremely damaging for us,” Oudea said.
The bank’s international operations made a net profit of 1.07 billion euros in 2015, three times the previous year when its business was dragged down by the economic woes in Russia and Brazil.
In 2015, the bank’s Russian offshoot still made a loss of 165 million euros for the group, but it was relatively light compared to the 538-million-euro loss it registered in 2014.
Societe Generale, in common with other banks, is being forced to change its retail bank strategy as customers increasingly bank online.
As a result, it has announced plans to close 400 branches and cut 2,000 jobs.
Societe Generale also set aside more provisions to pay for any future United States fines for possible violations of past sanctions or embargoes against Iran, Cuba and Sudan.
The bank added 600 million euros to its stock of provisions in 2015, taking it to a total of 1.7 billion as of the end of the year.


BP and SOCAR sign new Azeri oil deal

Updated 19 April 2019
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BP and SOCAR sign new Azeri oil deal

  • The Azeri Central East (ACE) platform, the latest phase of Azerbaijan’s giant Azeri-Chirag-Guneshli (ACG) oilfields extension program, is expected to produce 100,000 barrels of oil a day
  • BP and the government of Azerbaijan extended their agreement to continue developing the ACG fields until 2050 in a major deal in 2017

BAKU: Oil major BP and Azerbaijan’s state energy company SOCAR signed an agreement on Friday to build a new exploration platform for the South Caucasus nation’s three major oilfields, BP-Azerbaijan said in a statement.
The Azeri Central East (ACE) platform, the latest phase of Azerbaijan’s giant Azeri-Chirag-Guneshli (ACG) oilfields extension program, is expected to produce 100,000 barrels of oil a day and cost $6 billion to build, the company said.
The project is one of the biggest upstream investment decisions to have been signed in Azerbaijan so far this year.
The ACG fields, which to date have produced around 3.5 billion barrels of oil, are estimated to have the potential to yield another 3 billion barrels.
BP’s main aim now would be to maximize the extraction of remaining reserves, Robert Morris, senior analyst at Wood Mackenzie, said in a statement.
“ACE is central to those plans, adding 100,000 barrels per day of production at peak in the mid-2020s,” he said.
BP and the government of Azerbaijan extended their agreement to continue developing the ACG fields until 2050 in a major deal in 2017.
Separately, SOCAR and its partners at the BP-led ACG consortium plan to participate in a tender to acquire stakes being sold by two of its members, ExxonMobil and Chevron.
SOCAR President Rovnag Abdullayev made the announcement to reporters following a meeting of senior SOCAR figures on Friday.