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Societe Generale says Q1 hit by Libyan settlement

2 min

Paris (AFP)

French bank Societe Generale said Thursday that net profits were hit in the first quarter by a provision covering the settlement of a long-running legal dispute with Libya's sovereign fund.

Societe Generale said in a statement that its net profit fell by 19.2 percent to 747 million euros ($813 million) in the period from January to March, short of analysts' expectations.

The decline was largely attributable to a 350-million-euro provision to settle litigation with the Libyan Investment Authority, the bank explained.

Societe Generale and the LIA said Thursday they had signed "a confidential settlement agreement that resolves all matters between both parties concerning five financial transactions entered into between 2007 and 2009."

The LIA sued the French bank at the end of 2014 for $1.5 billion for allegedly channelling bribes to allies of Moamer Kadhafi's son, and the case had been about to go to court in Britain.

While the terms of the settlement remained confidential, Societe Generale said it "regretted... the lack of caution of some of its employees" and it "apologised" to the LIA.

The settlement totalled 963 million euros.

On an underlying level, the latest charge did not affect the bank's operating performance, Societe Generale said.

Revenues, or net banking income, increased by 4.8 percent to 6.47 billion euros.

Neither did it diminish the bank's capital buffers, with the core capital ratio increasing by 10 basis points to 11.6 percent, the statement said.

"Once again, Societe Generale has demonstrated the quality of its diversified and integrated banking model, with a good performance in all its businesses," said chief executive Frederic Oudea.

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