French bank Societe Generale has said it will not hit its profit target next year after suffering a near €400m (£349m) writedown on its holding of Greek debt.
Reporting a 23pc year-on-year fall in first-half net income to €1.66bn, Societe Generale said its target for 2012 of €6bn would "difficult to achieve within the scheduled timeframe".
The bank's profits were impacted by a €395m writedown on the value of its holdings of Greek government debt and what it described as "erratic market movements" in the second quarter.
Second-quarter net income at €747m was 31pc down on the same period in 2010, largely as a result of the reduction in value of its Greek debt holding.
Market observers said the writedown, which followed a similar move on Tuesday by BNP Paribas, might only be the beginning of a new round of debt writedowns by banks.
"There could be more to come," said Louise Cooper, markets analyst at BGC Partners. "The current deal still only forecasts that banks will take about a 20pc cut. Given that this still keeps Greek sovereign debt at unsustainable levels, greater bank writedowns could be coming in the future."
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