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Societe Generale cut jobs and sold assets last year to cope with stricter international capital and liquidity rules after French banks had their access blocked to U.S. dollar funding and European debt markets. The writedowns and litigation costs in the quarter offset a rebound in earnings at the corporate- and investment-banking unit, where the firm trimmed about 1,600 jobs in 2012 after shuffling management at the business.
The bank took a $404.7m fourth-quarter charge on 'litigation issues', it said, without giving further details. The lender also took a $925.4m charge related to its own debt in the quarter. Banks book accounting charges or gains tied to the theoretical cost of buying back their own debt as market prices fluctuate.
The firm is reorganizing its main businesses 'to improve commercial and operational efficiency', the company said Wednesday in a separate statement, without giving any cost-cutting targets. Societe Generale’s structure will have three main units made up of French retail banking and a new business blending international branch networks with specialized financial services. It will also combine corporate and investment banking with investment-management services including private banking.
In the meantime, Reuters reports that former Societe Generale trader Jerome Kerviel, who was sentenced to three years in jail and ordered to repay his former employer $6.6bn, has asked an employment tribunal to rule on whether he is liable for the losses the bank said he incurred in France's largest trading scandal.
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