French bank posts $4.9-billion loss
Societe Generale, France’s second-largest bank, said Thursday that unauthorized trading and sub-prime mortgage-related write-downs led to a record $4.9-billion net loss in the fourth quarter.
The red ink reflected $7.2 billion in losses racked up by junior trader Jerome Kerviel, as well as $4.3 billion in write-downs related directly or indirectly to the credit market turmoil triggered by losses in the U.S. housing market.
The Kerviel scandal was announced Jan. 24, shocking the global banking system.
On Wednesday a committee issued a report saying Societe Generale management had failed over the last 18 months to see that the 31-year-old trader had been amassing a huge, unauthorized position in European stock index futures.
Executive Chairman Daniel Bouton said the firm was determined to ride out the storm as an independent bank, despite reports of a possible bid from archrival BNP Paribas.
Societe Generale owns Los Angeles-based money management giant TCW Group, which wasn’t implicated in Kerviel’s trading.
The bank’s shares fell 2.3% on Thursday in Paris to a new multiyear low.
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