SocGen 1Q net drops on exposure to US mortgages

PARIS — French bank Societe Generale SA said Tuesday that write-downs linked to the crisis in financial markets led to a 23 percent decline in first-quarter profits.

Net profit fell to 1.1 billion euros ($1.7 billion) in the first quarter, from 1.43 billion euros a year ago, SocGen said.

The first quarter at France's second-largest was dominated by fallout by $7.18 billion in losses it blames on a single, rogue trader. The loss was announced in January but included in the bank's 2007 results.

The bank said it maintained its customer franchise and resumed development thanks to funds raised to cover the loss in a 5.5 billion euros ($8.5 billion) capital increase.

"Overall and faced with an exceptionally serious event, the group demonstrated its resilience and ability to bounce back during this quarter," the bank said in a statement.

The investment banking unit reported write-downs due to the exacerbation of the credit crisis in the U.S. and its extension to new asset classes of 1.18 billion euros ($1.83 billion).

Net profit at the corporate and investment bank dropped 79 percent to 139 million euros ($215 million).

The trading scandal has led to a shake-up in management at SocGen, which has split the posts of CEO and chairman to improve governance. Chief financial officer Frederic Oudea was promoted to become the new chief executive, effective on May 12.

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