SocGen Posts Record $4.9B Q4 Loss

Subprime writedowns and fraud drop bank's annual profit 82%
By Jim O'Neill,  Newser User
Posted Feb 21, 2008 9:54 AM CST
Societe Generale CEO Daniel Bouton is seen at the Societe Generale headquarters outside Paris in this Jan.24, 2008 file photo. French bank Societe Generale's board of directors decided Wednesday Jan....   (Associated Press)
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(Newser) – Societe Generale's annual profits plummeted a whopping 82% after a record $4.9 billion fourth quarter loss fueled by subprime woes and the actions of rogue trader Jerome Kerviel, reports Bloomberg. France’s second-largest bank today said net income was 947 million euros, compared to 5.22 billion euros in 2006. SocGen warned further losses could come in the first quarter.

Kerviel’s 4.9 billion euros in trading losses devastated the bank’s bottom line; without them, the bank would have earned 4.17 billion euros for the year and lost just 131 million euros in the quarter. SocGen also recorded 2.05 billion euros in writedowns related to the subprime market collapse. Chairman Daniel Bouton has offered to resign, but the board has voted to retain him.