French bank Societe Generale expects 'slightly positive' 2nd-Q income after 1st-Q loss

Societe Generale, France's 2nd-largest bank, said its 2nd-Q net income will be slightly positive thanks to its corporate & investment banking units. Its overall net income will be hit by a euro1.3B ($1.82B) writedown from credit default swaps & debt instruments. Global financial crisis led to major losses on risky securities at banks worldwide. "Solid operational performances, in particular in corporate & investment banking, will absorb the significant negative impact on the accounts of the substantial tightening of credit spreads stemming from an improving market environment & lower aversion to risk since mid-March," it said. The bank's Tier 1 ratio, seen as key measure of a bank's financial health, should be "close to" the level reported at the end of the 1st-Q, 9.2%. It said it is continuing to shed risky assets. Societe Generale shares fell, trading down 3.1% at euro36.72 in Paris trading. The Paris-based bank issues its quarterly results Aug. 5. It struggled to return to profitability last year after losing billions of euros in a massive trading scandal, & reported a euro278M net loss in the 1st-Q 2009 after devaluation of assets linked to U.S. real estate.