Société Générale expects to report "good profits" for 2007 despite a rogue trader defrauding the bank of £3.6bn, according to a statement.
The group expects a £500m to £600m profit for last year following news an un-named Nick Leeson-style trader took “massive fraudulent directional positions for 2007 and 2008 beyond his limited authority”.
The trader, suspended from the group along with his supervisors, held responsibility for plain vanilla futures on European equity market indices.
In a statement, the group says of the trader: “Aided by his in-depth knowledge of the control procedures resulting from his former employment in the middle-office, he managed to conceal these positions through a scheme of elaborate fictitious transactions.”
Despite the loss caused by the trader, Société Générale expects its financial services business to generate about 14% of year-on-year profit and its private banking arm 35% year-on-year growth.
It hopes its international retail banking arm will deliver about 40% year-on-year growth thanks to a development strategy it has implemented in the last few years.
However, the corporate and investment banking business will report a £1.7bn post-tax loss.
The group will post additional write-downs of £1.5bn in the last quarter of 2007. They include £800m relating to US residential mortgage risk, £410m relating to exposure to US monoline insurers and £300m unallocated additional provision relating to both.
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