SocGen CEO sees market nerves lingering
Paris, August 21, 2011
The head of French bank Societe Generale said in a newspaper interview released on Saturday that markets could remain nervous until third-quarter earnings are published at the end of October.
Societe Generale has seen its stock hammered this month along with other European banks in a global selloff that particularly hit banks exposed to Greek and Italian debt.
"The nervousness around banking stocks may last at least until the publication of third-quarter results, end-October, start of November," SocGen CEO Frederic Oudea told the weekly Journal du Dimanche's Sunday edition.
"At that time we will have the opportunity to communicate to markets that the bank does not have liquidity problems, that its activity is healthy and that its investment capacity is intact."
European banking shares ended a torrid week on Friday at their lowest level in nearly 29 months on worries about their ability to fund themselves amid a worsening economic slowdown.
Earlier this month France's AMF market regulator imposed a 15-day ban on the short-selling of stocks and opened an investigation into market rumours about Societe Generale that had tipped its shares into freefall.
Oudea said all banks were victims of the recent lowering of economic growth outlooks for the United States and Europe and of growing concern over the euro zone's debt crisis.
"The markets are also waiting for political decisions that are taking time. Several countries are preparing to hold elections: the US, France, Germany. We could see wait-and-see period. We have to be patient," he said.
Oudea said he did not see another recession ahead, but rather an excess of pessimism where before markets had been over-optimistic about the pace of the economic recovery.
He played down the likelihood of a wave of consolidation in Europe's banking sector in the wake of the stock market rout.-Reuters