SocGen: Banking industry will never see pre-crisis profitabilty again

Societe General Sign

Societe Generale pledged to cut costs this year and sought to reassure investors it was confident about its 2016 outlook, although its deputy chief executive warned that the industry would never return to its pre-crisis boom.

France's second-biggest listed bank said on Wednesday that net income rose 6.5 percent in the first quarter to 924 million euros ($1.06 billion).

It said it was confident about its 2016 outlook thanks to a diversified business model that helped outweigh investment banking weakness in the first quarter.

Séverin Cabannes, deputy chief executive of Societe Generale, told CNBC that the bank's growth was dependent on the wider economic landscape and that profitability might not return to pre-crisis levels.

He said the bank's growth was dependent on macro-economic growth did not think global GDP (gross domestic product) would return to pre-crisis levels.

"In terms of returns, the answer is clearly no, the returns in the banking industry, the profitability in the banking industry will never come back to the pre-crisis level," he said.

When adjusted for exceptional items, such as the revaluation of SocGen's own debt, net income was down 0.5 percent to 829 million euros.

Analysts in a Reuters poll had predicted a 7.7 percent decline in net income to 801 million euros on average.

"In 2016, the strength of the diversified business model, additional efforts on costs and solid asset quality should sustain both commercial and financial performances," the bank said.

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Reuters contributed to this report.

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