May 5 - The French bank Societe Generale misses first quarter result expectations, following unrest in the Middle East. Kirsty Basset reports
Recent turmoil in the Middle East is having widespread repercussions - and now a French bank says it's cutting into their profits. Societe Generale has reported lower than expected first quarter results, with volatility in the Middle East partly to blame. SocGen's exposure to Egypt and North Africa contributed to net profit falling almost 14 percent to 916 million euros. The bank is one of the most exposed in Europe to Egypt and North Africa, where political instability led to a 61 per cent slide in international retail earnings. SocGen's results were also impacted by tighter credit spreads, which forced the company to mark down the value of its debt. But the impact of global volatility masked a strong performance at home, with demand for mortgages and loan growth boosting French retail profits. The bank's key investment banking division accounted for almost two-thirds of group earnings in the quarter. SocGen CEO Frederic Oudea says he expects net profit to improve over coming quarters - he also told Reuters the bank is on track to meet its 2012 net profit target of 6 billion euros. Kirsty Basset, Reuters.