Shares in Societe Generale SA plummeted Wednesday, posting the steepest drop in the French stock market as renewed investor jitters over its exposure to Greek debt collided with rampant speculation that France's triple-A credit rating was at risk.
Shares in France's second-largest bank swung wildly, sliding over 20% at one point during trading before recovering to end down 14.7%, at 22.18 euros ($31.57). Shares of BNP Paribas SA, France's largest listed bank, and Credit Agricole were also hammered.
The pressure on the banks appeared to be influenced by reports that European banks holding Greek sovereign bonds maturing between 2020 and 2025 might now also be included in a restructuring agreement with the private sector as part of the second bailout for the troubled euro-zone nation. The current proposed program covers bonds only until 2020.
A spokeswoman said Societe Generale had no Greek sovereign bonds maturing after 2020 on its books and would therefore not suffer from an extension of the Greek bailout plan. Earlier this month the bank said it had booked a $562 million provision against second-quarter earnings to cover likely losses on its portfolio of Greek sovereign bonds maturing between now and 2020.
