Societe Generale issues milestone profit warning on Greek economic disaster

Societe Generale today issued the first actual profit warning among global banking giants in the current season for earnings announcements with a warning that exposure to Greece would make it struggle to reach its 2012 profit target.

The bank, which has about 2.65 billion in Greek sovereign bonds, took a near 400 million hit from its share in the private sector contribution to the crippled country's bailout plan.

France's second-biggest bank, which has a large investment banking presence in London, said its aim of 6 billion net profit in 2012, reiterated only two months ago, would now be "difficult to achieve".

The ambition had long been doubted by analysts, who were, on average, predicting profit of 5.3 billion for that year.

Chief executive Frederic Oudea pointed to an "uncertain economic and financial environment" in a statement, adding that the group had put in a resilient performance in the second quarter despite this backdrop.

Societe Generale's quarterly net income was below expectations, coming in at 747 million compared with the 1.15 billion average estimate from analysts. It was down 31.1 percent from a year earlier.