Posted Nov 22, 2022 9:51 am
Slumber Krupa He leaves his mark on Societe Generale’s head. The defense bank’s new strongman, who currently heads the group’s investment bank and is set to take over from Frédéric Oudéa in May, has announced a joint venture with American AllianceBerstein in the bank’s core business, equities.
“This partnership with one of the most recognized institutions in the areas of research and cash equities, combined with the global leadership in equity derivatives, will create an undisputed leader in the all-equities business serving clients and issue investors,” stated the director who for six years led investment bank Societe Generale in the United States.
The Red and Black Bank will take 51% control of a London joint venture specializing in equity research and trading. The entity, which was baptized by Bernstein and piloted for an initial 5-year term by American Group man Robert Van Bruegge, will provide investors with “investment advice and views on US, European and Asia-Pacific equity markets as well as execution,” the bank said in a statement.
100% control option
Societe Generale’s current director of cash equity activity, Stéphane Loiseau, will take over as Deputy General Manager.
Societe Generale negotiated an option to increase the capital by 100% after five years. Through this alliance, the bank is making it clear that it wants to further diversify its income into “low risk” activities. This new franchise will be rolling in three years, in 2025, and could increase its profitability by 15 to 20 basis points, according to the press release. The impact on the equity ratio will be limited to about 10 basis points.
Societe Generale’s core business, but with a risky profile on the more regulated segment of derivatives, the equity business generated €806m in revenue in the third quarter, up 1% over one year. Over nine months, it grew by 9.6% to €2.6 billion.
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