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Société Générale saw net profit decline by almost a fifth during the first three months of the year, weighed down by a provision to settle a dispute between the French bank and the Libyan Investment Authority.

SocGen booked a net profit of €747m ($813.8m) in the three months ended March 31, down 19.2 per cent from a year earlier and below analysts’ expectations for €863m.

The bottom-line result was hampered by an additional €350m provision for disputes, with the lender saying today it has settled a civil dispute with the Libyan Investment Authority relating to $2.bn of trades executed between 2007 and 2009, before Muammar Gaddafi was deposed as the country’s leader.

Underlying net profit was up 50 per cent at €1.39bn compared to the March quarter last year, with the bank saying it had a good commercial and financial performance from its core businesses.

The bank said net banking income rose 4 per cent to €6.52bn, driven by growth in its international retail banking & financial services as well as global banking & investor solutions divisions. Management said there was a “controlled” increase in operating expenses, of 2.6 per cent.

SocGen’s common equity Tier 1 ratio rose 10 basis points to 11.6 per cent from the end of December.

Frédéric Oudéa, chief executive, said in a statement:

Once again, Societe Generale has demonstrated the quality of its diversified and integrated banking model, with a good performance in all its businesses. Group net income testifies to the substantial increase in the contribution of its businesses, underpinned by its revenue growth and its cost and risk control.

The bank reports just a few days before the French election on Sunday, where centrist Emmanuel Macron is facing far-right rival Marine Le Pen, who has vowed to take France out of the euro currency and the EU.

French banks enjoyed a stock market rally over the past two weeks as pro-business candidate Mr Macron looks increasingly likely to win.

On Wednesday rival French lender BNP Paribas reported a 4.4 per cent rise in quarterly profit as a jump in fixed income and equities trading helped offset weaker retail banking in France and Italy.

SocGen has been pushing to aggressively cut costs in its retail operations, announcing in late 2015 a plan to cut 20 per cent of its bricks-and-mortar branches by 2020 while pushing more clients to its online bank.

The bank, which has seen profits weighed on by increasingly stringent regulations and record-low interest rates, said it would disclose its new strategic plan for 2017-2020 in the second half of this year

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