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SocGen net profit slumps 84%

French bank Societe Generale reported an 83.7% fall in third-quarter net profit on Monday and said it was financially strong enough to withstand the global financial crisis.

Net profit fell to €183 million ($233.8 million), with earnings hit by a €244-million loss at its corporate and investment banking division.

SocGen said non-recurring items from the collapse of Wall Street bank Lehman Brothers and other writedowns related to the market slump had a negative pre-tax impact of €1.208 billion.

Excluding this, net profit would have been around €1 billion, in line with guidance given by SocGen earlier this month.

SocGen is the first French bank to post third-quarter results. BNP Paribas, France's biggest listed bank, publishes on November 5. Credit Agricole, France's biggest retail bank, posts results on November 13.

The credit crisis has crippled the world's top banks and led to government intervention around the world, including France.

Earlier this month, US bank Wachovia Corp posted a record third-quarter loss of $23.9 billion. Spain's Santander, the euro zone's biggest bank by market capitalization, reported higher third-quarter profit but also a rise in bad loans.

SocGen shares closed up 6.5% at €42.18 on Friday, giving it a market capitalization of around €25 billion. Its shares have fallen around 55% since the start of the year, broadly in line with a 53% fall in the DJ Stoxx European bank index.

In January, SocGen fell victim to the world's worst rogue trading scandal when it unveiled €4.9 billion in losses, which it said were caused by unauthorized trades conducted by Jerome Kerviel, a 31-year old junior trader at the bank. (Reuters)