Société Générale: better prepared - FT.com A turning point, or a final whimper before France slips into the eurozone economic quagmire under François Hollande? On Thursday, Société Générale announced that profits fell by a less-than-feared 20 per cent in the first quarter versus a year ago. Still, its shares lost 4 per cent. Although the bank is addressing investors" liquidity and solvency concerns, they still fret about earnings sustainability. And chief executive Frédéric Oudéa's hard-won "transformation" could be derailed if the likely winner of Sunday's French presidential election lives up to his bank-bashing rhetoric. After last year's funding squeeze, Mr Oudéa does not need the higher funding costs that will accompany a slide in confidence in the sovereign. At least SocGen is more prepared for shocks. It has kept up deleveraging, selling €6.4bn of assets - both to shrink its funded balance sheet and meet regulatory capital hurdles. It has also completed its €9bn long-term funding for 2012; short-term financing is easing; and SocGen has boosted its liquid asset buffer to €104bn. All prudent stuff. It is on track with solvency, too. True, the bank pushed out full compliance with Basel III by a year to end-2013. But it is sure of hitting a core tier one capital ratio of between 9 and 9.5 per cent by then. Given its 24 basis points of capital generated in the first quarter, and continued deleveraging, that appears manageable - albeit with a heavy reliance on profit generation. Investment banking remains key. Fixed income, currencies and commodities trading revenue, up 40 per cent from a year ago, bucked the sector trend - payback for three years" investment in Ficc. European Central Bank funding helped. Oddly for SocGen, equities revenue fell. Its share price, at 0.4 times tangible book value, still partly reflects investor qualms about earnings quality - even if Mr Oudéa is broadly on the right track.