French bank Societe Generale pegged its exposure to Greek sovereign debt at 3 billion euros ($4 billion) for the first time on Wednesday after weeks of market fears over the debt-stricken country.

The group also reported forecast-beating results for first-quarter profit, helped by investment banking and fewer provisions on bad loans.

Its share price rose 3.1 percent to 39.82 euros, outperforming the sector despite some concerns its Greek exposure left uncertainty over the group.

Exposure to Greek sovereign debt and weakness of fixed income relative to other banks call for caution, said Raymond James analyst Jean Sassus.

Larger rival BNP Paribas , which reports results on Thursday, is the only major listed French bank not to have disclosed its exposure to Greece. Credit Agricole recently pegged its exposure at 850 million euros.

French banks have the highest exposure to Greece overall, according to Bank for International Settlements data as at end-2009.

French Finance Minister Christine Lagarde will meet with French banks on Wednesday to discuss their potential role in the Greek rescue package.


Societe Generale said it was confident of being able to achieve its targets for 2010 and that it anticipated a sustainable rebound after reporting forecast-beating first-quarter net profit of 1.1 billion euros.

It is comfortable it can achieve 2010 consensus analyst profit forecasts of 3 billion euros, a spokeswoman said.

The group is a month away from an expected unveiling of its future strategy to investors as it tries to navigate market volatility and uncertainty in key international markets such as Eastern Europe and Greece.

Greek macroeconomic woes pushed up provisions on bad loans at Societe Generale's international retail unit, with 149 million euros in Greece provisions in the first quarter.

Societe Generale did not comment on its exposure to Spain or Portugal, economies which have been under scrutiny as fears grow of a spreading of the debt crisis to other countries in Europe.

Economies (in Europe) are in a very different situation and you cannot compare Greece with the other countries, chief executive Frederic Oudea told CNBC in an interview on Wednesday.


Overall the bank said levels of provisions were showing signs of improvement quarter on quarter for the group, especially in corporate and investment banking, though it remains high historically.

The net profit figure came in well above the average analyst forecast of 614 million euros according to a Reuters poll of 10 analysts.

These are good results ... strong in French retail, good in other divisions including CIB, Citigroup analyst Kimon Kalamboussis said.

The outperformance was helped by 102 million euros in gains on the bank's own debt, driven by widening spreads, and a better-than-expected pretax impact from toxic legacy assets, he added.

Corporate and investment banking netted 541 million euros in quarterly earnings, as improved financial market conditions helped boost equities revenues and reduce the amount of writedowns on toxic assets. In the first quarter of 2009, Societe Generale had reported a loss of 278 million euros.

The bank's French retail division also put in an excellent performance, said Societe Generale, pushing up revenues and profits as French savers opened new accounts and hiked deposits.

Societe Generale shares are down 20 percent year to date, worse than an 8.6 percent fall for the STOXX 60 banks index.

The group has a market value of just under 30 billion euros.

($1 = 0.7508 euro)

(Editing by Dan Lalor and Jon Loades-Carter)