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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
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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.

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. 30, 2008 to keep Chairman and CEO Daniel Bouton in his post, despite mounting pressure over huge trading losses,...
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)
In this pool photo made available Wednesday, Feb. 6, 2008, French trader Jerome Kerviel is seen at his lawyer Elisabeth Meyer's office in Paris, Tuesday, Feb. 5, 2008. Potential legal troubles for French bank Societe Generale have expanded to the United States and the futures trader allegedly at the root...
In this pool photo made available Wednesday, Feb. 6, 2008, French trader Jerome Kerviel is seen at his lawyer Elisabeth Meyer's office in Paris, Tuesday, Feb. 5, 2008. Potential legal troubles for French...   (Associated Press)
View of the French bank Societe Generale headquarters in Paris suburb La Defense, Monday Feb.11, 2008. French bank Societe Generale SA said it lost a record $4.9 billion in the fourth quarter.
View of the French bank Societe Generale headquarters in Paris suburb La Defense, Monday Feb.11, 2008. French bank Societe Generale SA said it lost a record $4.9 billion in the fourth quarter.   (Associated Press)
A woman braves the wind outside the bank headquarters, Wednesday Jan. 30, 2008 in La Defense, outside Paris. French bank Societe Generale's board of directors decided Wednesday to keep Chairman and CEO Daniel Bouton in his post, despite mounting pressure over huge trading losses, a spokeswoman said. (AP Photo/Thibault Camus)
A woman braves the wind outside the bank headquarters, Wednesday Jan. 30, 2008 in La Defense, outside Paris. French bank Societe Generale's board of directors decided Wednesday to keep Chairman and CEO...   (Associated Press)
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subprime mortgages • earnings reports • corporate earnings • Jérôme Kerviel • Société Générale • Daniel Bouton • SocGen

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