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Société Générale reported better-than-expected results in the fourth quarter as cost-cutting and lower loan provisions led to jump in profits in French retail business and trading revenues picked up.

Net income over the quarter was €390m, down 41 percent from a year earlier, weighed down by a €235m charge tied to the sale of Splitska Bank, a Croatian lender, and a €150m provision for unspecified legal risks.

But the group reported more than doubling of operating income to €1.25bn in the fourth quarter. Over the full year, the group reported a 3.2 per cent rise in net income to €3.87bn.

A 25 per cent rise in French consumer banking profits to €402m was hailed as a vindication of the strategy announced late 2015 to cut 20 percent of its bricks-and-mortar branches by 2020 while pushing more clients to its online bank.

Frédéric Oudéa, SocGen chief executive, said: “In an economic environment that is less buoyant and much more demanding on the regulatory front, we have simplified our banking model… and continued to invest in the businesses of the future.”

Paris-based rival BNP Paribas this week said it was planning to invest €3bn in digital technology over the next three years – including online banking – and said it would continue closing the number of branches as it seeks to cut costs.

All European lenders have been struggling to increase profits in their retail operations in particular amid record-low interest rates, sluggish economic growth and tougher regulatory requirements.

SocGen in the fourth quarter also benefited from a 51 per cent increase in its global banking and investor solutions business, which includes trading and investment banking, helped by a global rebound in debt trading in the fourth quarter.

US banks all reported a strong jump in fixed income trading revenue in the fourth quarter as investors reset portfolios in anticipation of an interest-rate increase and as the election of Donald Trump spurred big bets on stocks that stood to benefit.

Finally, SocGen’s international retail banking and financial services posted a 50 percent increase in earnings, as the group’s troubled Russia operations returned to profit and results at banking networks in Africa improved.

The bank, which said it would disclose its new strategic plan for 2017-2020 in the second half of this year, said that its common equity tier one ratio — a vital benchmark of financial strength — had risen from to 11.5 per cent in December from 11.4 per cent in September.

SocGen also said that it would float a stake in its vehicle leasing unit ALD.

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