Nov. 08 - Losses at France's second biggest bank came despite a selling off of assets to meet tough new banking regulations, and the outlook for the French economy next year won't help. Joanne Nicholson reports
It's a grim outlook - that's the verdict from France's second biggest bank and those looking at the country's economy as a whole. Societe Generale's profits took a nose dive in the third quarter, despite selling off its Greek business, and American fund management unit. They fell 86 percent to 85 million euro. Revenue was also down 17 percent. Soc Gen's CEO says the outlook for next year doesn't look much better. SOUNDBITE (English) FREDERIC OUDEA CHIEF EXECUTIVE, SOCIETE GENERALE, SAYING: "Economic growth should remain sluggish overall (in 2013), with a key uncertainty in the U.S. - the fiscal cliff - in the beginning of the year. In the euro zone, we can't expect miracles, and in emerging markets let's see how China is doing. So uncertainty on the economic side. Of course, on the markets, a lot depends on the capacity to maintain this confidence." France's stagnating economy isn't helping the problem. The European Commission said France looks likely to miss its deficit reduction target next year, and its economy would grow at just 0.4 percent. Fitch has France on a negative outlook. Edward Parker is an economist at the rating's agency. EDWARD PARKER, HEAD OF EMEA, FITCH, SAYING: "There are two sets of concerns with France. One is, like many other countries they need to reduce the budget deficit, get back to stronger growth and to stabilize their government debt to GDP ratio which is heading to the 90% range and then the other sort of risk is the contingent liabilities crystallizing on the sovereign balance sheet, from further problems in the euro zone including large bailouts to other countries." Investors are worried that France's record-low bond yields don't reflect the fragility of its economy The toughest budget for 30 years is designed to tackle that. But it's not going down well with many workers - next week unions are calling for a day of protest across the country.