Societe Generale

THE SCOOP

A bank decreed

French banking giant Société Générale was formed by a decree signed by France's then-emperor Napoleon III on 4 May 1864, founding the firm in order to "foster the development of trade and industry in France."  During the past two centuries, that's what Société Générale has done.

Société Générale fast evolved into a leading European financial services company and a major player in the global market.  The firm began its international expansion in 1871 with the opening of a London branch.  By 1913, the booming banking powerhouse had established 1,400 branches and established itself as a network bank.  The company remained private until 1945, when the bank's capital stock passed into the hands of the French government.  Then in 1970, Société Générale stepped up its international development, concentrating on Asia and Eastern Europe.  Ten years later, in 1980, the bank had branches in 54 countries.   At end-March 2009, GIMS (Global Investment Management & Services) had €332 billion in assets under management, €2,762 billion in assets under custody and €8.8 billion in direct banking.

Not immune to state aid

Société Générale avoided the staggering losses attributed to mortgage-backed securities and subprime loans that spelled catastrophe for so many investment banks in 2008.  Nevertheless, in January 2009, after announcing that it "broke even" for the fourth quarter of 2008, the firm accepted €1.7 billion from the French government.

Regarding Société Générale's fourth-quarter breakeven results, and its €2 billion profit for the fiscal year 2008, Pierre Flabbee, an analyst at Kepler Capital Markets, had this to say to the International Herald Tribune: "They are not what you would call very good results, but it reassures in a market where anxieties are maybe excessives."

The new wave of global expansion

Société Générale's capital markets subdivision was created in 1987, and Société Générale was privatised soon after.  The next year, and following the lead of many commercial banks, the firm acquired an investment banking arm, purchasing New York-based Cowen & Company.  The following year, Société Générale set up retail banking outside France, expanding into Romania, Bulgaria and Madagascar.  The firm's Central European operations, combined with Société Générale's acquisitions in Africa, have headed up the bank's external growth.  It also owns 64.7 per cent stake in Russia's Rosbank.

A Générale feeling

Société Générale Group is divided into four businesses: retail banking, specialised financial services, global investment management & services and corporate and investment banking.  In France, the bank's retail banking division runs two distribution networks in tandem, Société Générale and Crédit du Nord.  In Europe, the specialised financial services activities of the bank have seen it become a major player over the past five years.

Société Générale's Global Investment Management & Services division is huge, encompassing five complementary business lines: Société Générale Asset Management, SG Private Banking, Securities Services, Newedge, a multi-asset brokerage business and Boursorama, an online banking platform. This division employs 11,000 people worldwide.

SG Private Banking has offices in 21 countries, offering wealth management services to clients with a net worth of more than €1 million.  In 2008, SG Private Banking was ranked best private bank worldwide for structured products, and best private bank in Japan and in Luxembourg by Euromoney.  Also in 2008, Société Générale Securities Services acquired UniCredit's Capitalia Group's clearing, custody, depositary bank and fund administration businesses.  The acquisition brought SGSS an additional €102 billion in assets under custody and an additional €27 billion in assets under administration.

Problems au générale

In late 2007, Jérôme Kerviel, a junior trader at the bank, was found to have stolen computer codes and falsified documents, costing the bank €4.82 billion.  Kerviel was arrested in January 2008, served about six weeks in prison, and was released in March; the next month, he began work at Lemaire Consultants & Associates, a firm that specialises in computer security and system development.  Per the conditions of his release, Kerviel cannot enter trading rooms or exchanges, and cannot engage in any activity related to financial markets.  A lawyer for Société Générale, Jean Veil, said that he was "delighted" that Kerviel had found employment. "It means he will be in a position to start repaying the bank," he told The New York Times.



Societe Generale


29 Blvd. Haussman
Paris 75009
Phone: +33 1 4214 2000
Fax: +33 1 4214 5451
www.socgen.com

STATS


  • Employer Type: Public
  • Stock Symbol: GLE
  • Stock Exchange: Euronext Paris
  • Chairman & CEO: Frédéric Oudéa
  • 2010 Employees: 156,681

Major Office Locations

  • Paris, France

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