SocGén posts record loss

Société Générale, France's second-biggest listed bank, posted a record fourth-quarter loss, in line with its forecast after earnings were hit by its previously announced £3.6 billion trading loss.

The bank made a fourth-quarter net loss of £2.53 billion, which compared with a €1.18 billion profit in the fourth quarter of 2006. SocGén had already forecast this loss last month.

The 2007 dividend fell to €0.90 from €5.20 a year earlier.

On January 24, SocGén announced €4.9 billion of losses which it blamed on rogue deals carried out by Jerome Kerviel, a 31-year-old junior trader at the bank.

SocGén is the latest leading bank to post weak results as the world's financial sector reels from losses related to US subprime mortgages.

Earlier this month, UBS posted a fourth quarter net loss of £5.81 billion while banks Merrill Lynch and Citigroup both reported fourth-quarter net losses of $9.8 billion in January.

On Wednesday, France's biggest listed bank BNP Paribas, which many analysts say could bid for SocGén, reported a 42 per cent fall in its fourth-quarter net profit.

SocGén is in the process of raising €5.5 billion from a rights issue that has been fully underwritten by investment banks JP Morgan and Morgan Stanley.

SocGen said yesterday that it would continue with a share buyback programme to counter the dilutive effects of the rights issue.