| Type | Société Anonyme |
|---|---|
| Traded as | Euronext: GLE, OTC Markets Group: SCGLY |
| Industry | Financial services |
| Founded | May 4, 1864 |
| Headquarters | Boulevard Haussmann, 9th arrondissement, Paris (registered office), Tours Société Générale, Nanterre/La Défense, France (operational headquarters) |
| Area served | Worldwide |
| Key people | Frederic Oudea (Chairman and CEO) |
| Products | Retail, private, investment and corporate banking; insurance; investment management |
| Revenue | €26.42 billion (2010)[1] |
| Operating income | €5.713 billion (2010)[1] |
| Profit | €3.917 billion (2010)[1] |
| Total assets | €1.132 trillion (end 2010)[1] |
| Total equity | €50.98 billion (end 2010)[1] |
| Employees | 160,700 (average, 2010)[1] |
| Website | www.societegenerale.com |
Société Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La Défense in the city of Nanterre, west of Paris. The three main divisions are Retail Banking & Specialized Financial Services (particularly in France and Eastern Europe), Corporate and Investment Banking (Derivatives, Structured Finance and Euro Capital Markets) and Global Investment Management & Services.
It is no. 2 French bank behind BNP Paribas and the no. 8 bank in the European zone ahead of Credit Suisse. Société Générale has been ranked as one of the world's most admired companies to work in.[2]
Société Générale is one of the oldest banks in France. The original name was Société Générale pour favoriser le développement du commerce et de l'industrie en France (English: General Company to Support the Development of Commerce and Industry in France). Société Générale is often nicknamed SocGen (pronounced "sock jenn") in the international financial world.
The long term debt of the group is currently ranked A+ by S&P, Aa3 by Moody's and A+ by Fitch.[3]
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The bank was founded by a group of industrialists and financiers during the second empire, on May 4, 1864, to support the development of commerce and industry in France. The bank's first chairman was the prominent industrialist Eugène Schneider (1805–1875) followed by Edward Blount, a Scotsman.
The company started to hire employees and establish offices. Coverage of France went ahead at a steady rate. By 1870, the bank had 15 branches in Paris and 32 in the rest of France. It set up a permanent office in London in 1871. At the beginning, the bank used its own resources almost entirely for both financial and banking operations. In 1871, Société Générale moved into the public French issues market with a national debenture loan launched to cover the war indemnity stipulated in the Treaty of Frankfurt.
From 1871 to 1893, France went through a period of economic gloom marked by the failure of several banking establishments. The company continued to grow at a more moderate pace; in 1889, there were 148 banking outlets, demonstrating the group's capacity to withstand unfavourable economic conditions.
Starting in 1894, the bank set up the structures characterising a large, modern credit institution. As well as collecting company and private deposits, its branches started to provide short-term operating credits for industrialists and traders. It also moved into placing shares with the general public, issuing private debenture loans in France and also in Russia. Acquisition of equity stakes became a more secondary activity. The company's excellent financial health allowed it to expand its shareholding structure. In 1895, Société Générale had 14,000 shareholders; in 1913, they numbered 122,000. The war years were difficult and had serious consequences with the loss of Russian business. However, during the 1920s Société Générale became France's leading bank: its network had grown sharply since the 1890s, with a huge number of branches and seasonal offices allowing in-depth penetration of the provincial market (260 seasonal offices in 1910 and 864 in 1930). The number of sales outlets rose from 1,005 in 1913 to 1,457 in 1933 (including those operated by Sogenal). Thanks also to the dynamism of supervisory and management staff at head office and in the branch offices it moved ahead of Crédit Lyonnais (in terms of deposits collected and loans distributed) between 1921 and 1928. To satisfy the requirements of investing companies, Société Générale created a subsidiary, Calif, specialised in medium-term credit in 1928.
The 1930s were another difficult period. Given the decline in international and French business, the bank was forced to nationalise its network by closing down local branches. On the eve of World War II, the number of sales outlets was not much greater than in 1922. However, Société Générale was active in placing numerous public loans launched during this period by the State or the colonies. The war and the German Occupation interrupted its advance, but the bank moved into Africa and the United States.
Société Générale was nationalised in 1945. It now had a single shareholder: the State. The period from 1945 to 1958 was characterised in France by rapid economic recovery but also a greater disequilibrium in the balance of payments, calling for continued exchange controls and virtually permanent credit control measures. It was not until 1959 that the economy really recovered, but credit controls were reinforced due to persistent inflationary pressures. Sharp growth in production and foreign trade opened up new areas of business for the banks. The industry underwent some quite radical changes, one of the most striking of which was much greater specialisation of credit. The range of banking services on offer expanded uninterruptedly. Thanks to its presence in New York, Société Générale was able to take advantage of the flow of business generated by the Marshall Plan. Société Générale continued to expand in France and elsewhere. It moved into Italy and Mexico and altered the status of its establishments in Africa after decolonisation, in accordance with the laws passed by these newly independent countries.
Société Générale gave new impetus to its French network, with an acceleration in growth after 1966 following elimination of prior authorisation for opening branch offices. International expansion was just as vigorous. It was no longer limited, as before, to the main financial centres (London, New York), neighbouring countries (Belgium, Spain) and the former colonies, with the primary aim of facilitating the business of French firms, but was also aimed at guaranteeing the bank's presence where new markets were developing, either to export the technical expertise it had acquired in certain fields, or to keep up its contact with the multi-nationals. 1966 and 1967 represented a fundamental turning point in banking regulations, the main development being attenuation of the distinction between deposit and investment banking, and creation of the home mortgage market. Société Générale took advantage of this and acquired leading positions in some new financing techniques designed primarily for companies, such as finance leasing, setting up specialised credit subsidiaries for this purpose. The 1970s were characterised by two major developments: expansion of the international network and across-the-board introduction of IT facilities to cope with extension of the customer base and the development of deposit money. In 1971, the appearance of automatic cash machines crowned the success and development of the credit card. In 1973, Société Générale opened its representative office in the Soviet Union. In 1975, Société Générale introduced Agrifan, a food-products trading company to connect French suppliers with foreign food buyers. The following year during the Bastille Day holiday, a meticulously planned robbery was carried out against Société Générale's most heavily fortified vault in France by ex-paratrooper and wedding photographer Albert Spaggiari. The robbery which involved secretly tunneling underground and compromising the walls of the bank vault netted Spaggiari over 12 million in cash, jewellery, and bullion.[4] From the beginning of the 1980s, against a backdrop of deregulation and technological change, internationalisation of the markets and the emergence of new financial instruments, Société Générale set itself two commercial objectives. It focused increasingly on private customers via its network of branches and by acquiring specialised subsidiaries. It pursued and expanded its activities in the capital markets in France, and then, on a selective basis, in the different international financial centres. On 29 July 1987, Société Générale was privatised. It had been chosen from among the three leading French commercial banks nationalised in 1945 for its excellent risk-coverage, equity and productivity ratios. George Soros was a share-holder in 1988.
In recent years, the Société Générale Group has focused on developing its activities around three core businesses through a combination of organic growth and acquisitions.
Retail Banking was strengthened in 1997 through the acquisition of Crédit du Nord, highlighting the Group's determination to capitalise on the restructuring of the French banking system. At the same time, Société Générale has looked to secure the long-term loyalty of its customers (launch of "one account number for life" and introduction of Jazz, a package of service offers).
In 1999 it entered into a merger agreement with rival bank Paribas, but this was scuppered by a competitor, the Banque Nationale de Paris (BNP).
In 1998, Société Générale set up Retail Banking outside France as a separate division, underscoring the Group's resolve to make this business one of its strategic development axes. This activity was also strengthened in 1999 through the acquisitions made in Romania (BRD - Groupe Société Générale), Bulgaria (Société Générale Expressbank) and Madagascar. This external growth strategy has been manifested through acquisitions in Central Europe (Komerční Banka in the Czech Republic and SKB Banka in Slovenia) in 2001.
At that time, Société Générale became officially concerned with money laundering scandal and underground economy.[5]
In 2001, Société Générale acquired a controlling interest in the TCW Group. The TCW Group, which was founded in 1971, was originally known as Trust Company of the West and is the parent of TCW/Crescent Mezzanine one of the leading mezzanine capital firms in the US.[6][7] Today, the TCW Group operates as a subsidiary of Societe Generale Asset Management.
Africa is also a major area of interest for the bank, with the 2002 purchase of Eqdom in Morocco (the market leader in consumer lending) and Union International de Banque in Tunisia. In addition, 51% of SSB Bank in Ghana in 2003 and 50% of Geniki Bank in Greece in 2004 were acquired . In terms of specialized financial services, a department created in mid-2001, the purchase of two Deutsche Bank subsidiaries, ALD Automotive for multi-brand auto leasing and financing and GEFA for corporate sales financing enabled Société Générale to increase its European presence in these sectors. In 2002, it continued to pursue its external growth strategy by purchasing Hertz Lease, a European subsidiary specializing in long-term leasing and fleet management for Ford Motor Company vehicles.
With a track record as leader in France for financial savings products (mutual funds, investment funds, company savings plans), the Group has developed its Asset Management and Private Banking activities: in 1999, its subsidiary, Société Générale Asset Management, pursued the strategy of developing both its mutual fund management business in France and its activities aimed at major institutional investors at an international level. With the launch of Société Générale AM UK in London and the acquisition of Yamaichi in Japan, Société Générale Asset Management has taken a decisive step in establishing its international presence and is now able to offer its customers truly global fund management capabilities. Société Générale also has a worldwide presence in private banking activities. After pursuing a deliberate policy of acquisitions in 1998, Société Générale Private Banking consolidated and developed its franchise in 1999 against a backdrop of tougher competition.
During the 1st quarter 2004, the third branch of activity of the Société Générale Group, GIMS Global Investment Management and Services was created. In February 2004, Société Générale set up a new division named SG GSSI, Global Securities Services for Investors, which provides full investor services on securities and listed derivatives covered by the group around the world. SG GSSI is attached to the GIMS which regroups SG Asset Management, SG Private Banking and SG Global Securities Services for Investors. GIMS employs 7,600 people.
Société Générale is developing its Corporate and Investment Banking businesses under the SG CIB brand name, which was introduced by the Group in 1998. Bolstered by a sound client base and a recognised capacity for innovation borne out by the league tables (the Group is ranked among the global leaders in equity derivatives, convertible bonds, export finance, etc.), Société Générale is looking to develop its M&A, advisory and IPO activities through the acquisition of specialised firms (SG Hambros in the United Kingdom, Barr Devlin in the United States).
French reporter Denis Robert and former #3 of Cedel Ernest Backes, have accused Société Générale of having non-published accounts in Clearstream, which is at the centre of a financial scandal. The bank denied those accusations.
On January 24, 2008, the bank announced that a single futures trader at the bank had fraudulently lost the bank €4.9billion (an equivalent of $7.2billionUS), the largest such loss in history.[8][9] The company did not name the trader, but other sources identified him as Jérôme Kerviel, a relatively junior futures trader who allegedly orchestrated a series of bogus transactions that spiraled out of control amid turbulent markets in 2007 and early 2008.[10]
Partly due to the loss, that same day two credit rating agencies reduced the bank's long term debt ratings: from AA to AA- by Fitch; and from Aa1/B to Aa2/B- by Moody's (B and B- indicate the bank's financial strength ratings).[3][11]
Executives said the trader acted alone and that he may not have benefited directly from the fraudulent deals. The bank announced it will be immediately seeking 5.5 billion euros in financing. On the eve and afternoon of January 25, 2008, Police raided the Paris headquarters of Société Générale and Kerviel's apartment in the western suburb of Neuilly, to seize his computer files.[12] French presidential aide Raymond Soubie stated that Kerviel dealt with $73.3 billion (more than the bank's market capitalization of $52.6 billion). Three union officials of Société Générale employees said Kerviel had family problems.[13] On January 26, 2008, the Paris prosecutors' office stated that Jerome Kerviel, 31, in Paris, "is not on the run. He will be questioned at the appropriate time, as soon as the police have analysed documents provided by Société Générale."[14] Spiegel-Online stated that Kerviel may have lost 2.8 billion dollars on 140,000 contracts earlier negotiated due to DAX falling 600 points.[15]
Société Générale SA says it had a net loss in the fourth quarter of 2007 after the French bank took a €4.9 billion ($7.18 billion) hit closing the unauthorized trading positions of Jérôme Kerviel.[16]
On March 21, 2008, Société Générale filed suit in Istanbul Commercial Court against Goldaş, a Turkish Jewelry firm, claiming the company had not paid for 15 tonnes(15,000 kg) of gold it had received through a consignment agreement.[17][18] Goldaş stated that the consignment agreement was only for 3,250 kg of gold with a value of US$94 million.[19] Société Générale also filed a concurrent suit in the United Kingdom preferring to settle the matter in a third country. On April 4, 2008, the Istanbul court issued a temporary injunction to freeze assets of Goldaş equal to the value of 10 tonnes of gold, or US$285 million. In June 2008, the court found Goldaş not guilty. Société Générale then escalated the case to the Istanbul Court for Serious Crimes. When this court affirmed the previous court's decision, Société Générale pursued an annulment of the decision with the Turkish Ministry of Justice. The ministry expedited the request to the Turkish Supreme Court of Appeals, which subsequently refused Société Générale's request on Feb. 20, 2009.[20] On June 3, 2010, Goldaş filed a counter-suit against Société Générale for defamation of the Turkish company's reputation and requested punitive action against the bank.[21]
On March 15, 2009, AIG disclosed that, among its counterparties, Société Générale was to date the largest recipient of both credit default swap (CDS) collateral postings ($4.1 bn) and CDS payments ($6.9 bn), payments made possible in part by the 2008 U.S. government bailout of AIG.[22]
Société Générale is the 3rd largest Corporate and Investment bank in the Eurozone by net banking income and the 6th largest French company by market capitalization. It employs 120,000 people, of which 75,000 in Europe, and maintains a presence in 80 countries. The bank is active in the finance, investment and asset management markets.
In France, Société Générale is active in retail banking with more than 2,700 branches (including its Crédit du Nord banking division).
SG CIB Société Générale Corporate and Investment Banking, the Corporate and Investment Banking arm of the Société Générale Group, is the 3rd largest corporate and investment bank in the euro zone by net banking income. Société Générale Corporate and Investment Banking serves corporates, financial institutions and investors in over 45 countries across Europe, the Americas and Asia. It provides value-added integrated financial solutions and is a reference bank in its three specialist areas: Euro Capital Markets, Derivatives and Structured Finance.[23][24]
Starting in 1997, the Chairman of Société Générale was Daniel Bouton, a former cabinet director under Alain Juppé. In May 2008, the Chief Executive Officer became Frederic Oudea.
On April 2009, Daniel Bouton left Société Générale.[25]
Affiliates of Société Générale include:
Fimat International Banque S.A. is a global brokerage and prime brokerage organization and is a wholly owned subsidiary of Société Générale Group.[28] Fimat businesses involve a range of clearing and execution services on listed or OTC derivatives and cash products.[29]
Fimat was created in 1986, following the creation of the Paris-based MATIF (Marché à Terme International de France), the French Futures and Options Exchange, in February 1986. In 2005 Fimat completed the acquisition of Cube Financial.
Merged in January 2008 with Calyon Financial to form Newedge ([www.newedgegroup.com]). Newedge's holders are SG and Calyon.
Lyxor Asset Management is an investment company based in France, and a wholly owned subsidiary of Société Générale. It offers exchanged-traded index funds and other ETFs, exchanged-traded notes (ETN),[30] and several other products to private and corporate investors.
Société Générale's head office is in the Tours Société Générale in the business district of La Défense in the city of Nanterre, west of Paris. The company moved there in June 1995 from the former head office along Boulevard Haussman in the 9th arrondissement of Paris. The head office has 7,000 employees.[31] The former head office remains as the company's registered office.[32]
In 2010 the French government's Autorité de la concurrence (the department in charge of regulating competition) fined eleven banks, including Société Générale, the sum of 384,900,000 Euros for colluding to charge unjustified fees on check processing, especially for extra fees charged during the transition from paper check transfer to "Exchanges Check-Image" electronic transfer.[33][34]
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