Aug. 2 (Bloomberg) -- Societe Generale SA, France's second- biggest lender, said profit climbed 33 percent, beating analysts' estimates, led by equity-derivative trading and consumer banking outside its home market.

The shares rose the most in three months after the Paris- based company said today that second-quarter net income increased to 1.74 billion euros ($2.38 billion) from 1.34 billion euros a year earlier. Excluding the sale of its stake in Euronext NV, profit climbed 14 percent, ahead of estimates of analysts surveyed by Bloomberg.

The results show that Societe Generale Chairman Daniel Bouton's strategy to beef up the lender's equity-derivative business is paying off. He's also invested more than 2 billion euros in acquisitions in countries such as Russia as higher interest rates curb lending growth at home. The bank said today it has ``low exposure'' to the credit-market turmoil, which was sparked by defaults in U.S. subprime mortgages.

``Societe Generale's international business is developing well,'' said Pierre Flabbee, an analyst at Kepler Equities in Paris who has a ``buy'' rating on the stock. ``This confirms a solid performance that started in the first quarter. Basically there were no bad surprises.''

Societe Generale's shares rose 5.36 euros, or 4.3 percent, to 129.89 euros, the biggest gain since April 20. The stock has gained 1 percent this year, giving the company a market value of 60.6 billion euros.

International Growth

Profit from retail banking outside France gained 56 percent to 168 million euros in the second quarter as Societe Generale opened 263 new branches in Romania and 23 in Russia. That compares with a gain of 1.7 percent to 369 million euros in French banking. The company has added more than 800,000 international retail clients in the past year.

``Retail banking did well, which allowed the bank to report better-than-expected earnings,'' said Matthieu Bordeaux-Groult, who helps manage $5 billion at Richelieu Finance in Paris. ``Investment banking activity also did well.''

Societe Generale's earnings from investment banking rose 22 percent to 721 million euros, boosted by trading in equity derivatives. That helped the company recover from a profit decline in the first quarter, when it was hurt by rising costs from opening new branches. Earnings growth in the period also exceeded that of bigger French rival BNP Paribas SA, which yesterday posted a 20 percent gain.

Equity Trading

The company said it had ``very good results'' from trading in its equities business. The bank made bets on the differences between indexes and the stocks in them as well on expectations of future price swings in equity markets, said Jean-Pierre Mustier, head of Societe Generale's corporate- and investment- banking division, at a press conference in Paris.

Societe Generale is the top-ranked firm in equity derivatives, according to a survey published by Risk Magazine in September.

The bank's shares fell 2.3 percent yesterday in Paris as concern about worsening credit markets drove down financial stocks. The Bloomberg Europe Banks and Financial Services index fell 1.9 percent after Bear Stearns Cos., the manager of two hedge funds that collapsed last month, halted redemptions from a third fund.

`Low Exposure'

Societe Generale said today it has ``low exposure to the credit market crisis.'' Securitization and collateralized debt obligations in the U.S. are less than 1 percent of the investment bank unit's revenues.

Societe Generale has 600 million euros of buyout loans waiting to be syndicated, Mustier said. It doesn't hold any so- called covenant-light loans or any equity bridges.

None of the funds Societe Generale manages have any liquidity problems as a result of the collapse of the U.S. subprime and CDO markets, Bouton said today at the press conference.

Societe Generale's unit in the U.S., TCW Group Inc., helps set up and run collateralized debt obligations and makes its money from charging fees, not trading, the French bank said. CDOs package debt securities such as mortgage-backed bonds and then slice them up into parcels with different levels of risk.

Loan Provisions

Provisions for bad loans rose 22 percent in the second quarter to 186 million euros, less than the 214 million euros analysts estimated.

Profit from asset management climbed 25 percent, excluding the Euronext stake, as the bank increased its assets under management by 17.5 billion euros in the three months to 467 billion euros. NYSE Group Inc. the operator of the New York Stock Exchange bought 97 percent of Euronext in April.

Bouton also reiterated today that he has no plans for a merger.

``Look at the quality of growth we deliver, look at the quality of profit we deliver,'' Bouton told journalists today in Paris as he brandished a copy of the bank's results. ``A merger isn't urgent or necessary.''

The French daily Les Echos reported on June 8 that Societe Generale was studying a bid for BNP Paribas. The head of UniCredit SpA, Italy's biggest bank, said in May the company was considering acquisitions including Societe Generale and Capitalia SpA.

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By Sebastian Boyd