Societe Generale targeted a slightly bigger cushion of capital and higher cost savings as the French bank reported better-than-expected earnings. As Hayley Platt reports the Dutch bank ING also reported positive results.
ATTN CLIENTS - THIS STORY REPLACES 3096 - IT CONTAINS UPDATED UNICREDIT RESULTS - PLEASE MAKE NO FURTHER USE OF 3096. European banks continue to show signs of a recovery. Societe Generale posted better than expected earnings in the second quarter. Net income rose to 1.3 billion euros, comfortably beating expectations. France's second-biggest listed bank expects core equity capital to be at 11 percent by the end of next year. It's already reached its previous target of 10 percent. The recovering French economy has helped - retail revenue was 4.2 percent higher than a year earlier. And cost cuts are being increased. That - and a promise to maintain dividend payouts - pushed shares up more than 8 percent. Bill Blain is from Mint Partners. SOUNDBITE: Bill Blain, Market Strategist, Mint Partners, saying (English): "Banks that are producing solid results as SocGen and the other French banks have done, suddenly they're back in favour. They're managing to control costs, many of them have big plans to further reduce costs and they're looking at their assets and continuing to de-lever." The good news continued to the Netherlands, where it's largest financial group ING posted a 21 percent rise in underlying second quarter profits from its banking arm. ING put it down to increased loans to customers, lower risk costs and growth from deposits. UniCredit also beat forecasts with a 522 million euro second quarter net profit. Italy's biggest bank reported a stronger than expected capital base, allaying fears for now that the bank may need a rights issue The news sent shares up almost seven percent.