Societe Generale SA said third-quarter profit fell by a more-than- estimated 84 per cent as credit-related writedowns resulted in losses at the investment-bank and asset-management units.
Net income dropped to €183 million ($234 million) from €1.12 billion a year earlier, the Paris-based bank said in an e-mailed statement today.
The median estimate of 12 analysts surveyed by Bloomberg was a profit of €581 million.
Societe Generale recorded markdowns of at least €1.4 billion in the third quarter, including €447 million related to the bankruptcy of Lehman Brothers Holdings and €453 million tied to US bond insurers.
Chief Executive Officer Frederic Oudea decided not to use new accounting rules that are less stringent on markdowns, which helped Deutsche Bank AG, Germany's biggest bank, show an unexpected third-quarter profit of €435 million.
Societe Generale dropped 32 per cent last month in Paris trading, twice as much as BNP Paribas SA, France's largest bank.
Societe Generale touched a 10-year low on October 29th on concerns about the bank's risk in Russia and Eastern Europe, which account for about a fifth of profit, according to analysts.
Eastern European countries and Russia will continue to grow faster than Western Europe and the US, the bank said. To limit loan losses, Societe Generale will be "more selective" in making loans in Romania.
"There is not a problem with Societe Generale," Oudea said in an interview. "No fantastic losses happened in October as markets seem to think."
The corporate and investment bank unit had a net loss of €244 million in the third quarter, while Societe Generale Asset Management had a loss of €6 million. Profit declined 5 per cent at the French consumer-banking unit and rose 48 per cent at the international retail operations.
Bloomberg