Société Générale

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  Société Générale SA
logo
Country FranceFrance France
Seat Paris
legal form Société anonyme
ISIN FR0000130809
BIC SOGEFRPPXXX
founding 1864
Website www.societegenerale.com
Business data 2018
Total assets 1,309 billion euros
Employee 147.125
management
Corporate management

Lorenzo Bini Smaghi (Chairman)
Fréderic Oudéa (CEO)

The Société Générale , abbreviated SG or SocGén , based in Paris, is one of the most important commercial banks in France and, together with Crédit Lyonnais and BNP Paribas, is one of the three oldest commercial banks in the country (les trois vieilles) . Its original name is Société Générale pour favoriser le développement du commerce et de l'industrie en France ('General Society for the Promotion of the Development of Trade and Industry in France').

The major bank is one of 30 banks that have been classified as a systemically important financial institution by the Financial Stability Board (FSB) . It is therefore subject to special monitoring and stricter requirements for the endowment with equity .

history

1864-1893

The bank was founded during the Second French Empire on May 4, 1864 to promote the development of trade and industry in France. It hired employees and was scheduled to open offices across France. In 1870 the bank had 15 branches in Paris and 32 in the French provinces. In 1871 she established a permanent office in London . In the beginning, the bank needed almost all of its own resources for both lending and deposit business. In 1871 it expanded its activities to the public emissions market by taking over the sale of bonds , through which the reparation payments agreed in the Peace of Frankfurt after the defeat in the Franco-Prussian War should be raised. Between 1871 and 1893, France went through an economically dark period, which was connected with the collapse of various banks. The bank grew moderately and by 1889 already had 148 branches, which demonstrated the company's ability to withstand unfavorable economic situations.

1894-1930

In 1894 the bank began to build the structures that characterize a modern large bank: it began to attract both private and business assets, but also to provide short-term loans for industrialists and traders. It also began publicly issuing foreign debt securities in both France and Russia . The acquisition of equity interests became a secondary activity. The healthy, excellent financial results allowed the bank to expand its share structure: In 1895 Société Générale already had 14,000 shareholders , the number of which had increased to 122,000 by 1913. The war years were difficult and had serious consequences with the loss of business in Russia. Nonetheless, Société Générale became the leading commercial bank in France in the 1920s: its branch network grew significantly from the 1890s, with a large number of branches and seasonal offices that enabled a deep penetration of the provincial market (1910: 260 seasonal offices; 1930: 864 seasonal offices). Thanks to the dynamism of the supervisory bodies and management at the head office and branches, it overtook rival Crédit Lyonnais between 1921 and 1928 in terms of fixed assets deposited and loans issued. In order to meet the needs of investing companies, Société Générale established a subsidiary, Calif , in 1928 , which specialized in medium-term loans .

1931-1945

The 1930s were another difficult period. Due to declining international and French business, the bank was forced to streamline its branch network by closing local branches. On the eve of World War II , the number of its branches was not much larger than in 1922. Nonetheless, Société Générale was active in the placement of numerous state and colonial public bonds during this period. The war and German occupation halted its expansion, but the bank went to Africa and the United States .

1945–1964

Société Générale was nationalized in 1945. It only had one shareholder: the French state. The period from 1945 to 1958 in France was characterized by the rapid economic recovery, but also by a larger balance of payments imbalance , which required constant exchange rate controls and almost permanent credit control measures. The economy did not strengthen until 1959, but credit controls continued to counter inflationary trends. Rapid growth in production and foreign trade opened up new business opportunities for the banking sector. The industry has seen some radical changes; one of the most important was the greater specialization of the credit system. The breadth of the banking products on offer expanded continuously. Thanks to its presence in New York , Société Générale was able to participate in the business created by the Marshall Plan . Société Générale continued its expansion in France and abroad. She went to Italy and Mexico and changed the status of her business in Africa after decolonization in accordance with the laws of these newly independent countries.

1965-1990

After the approval requirement for the opening of branches was lifted in 1966, Société Générale received new impetus for its French branch network. Their international expansion was also brisk. It was no longer, as before, limited to financial centers (London, New York) and neighboring countries ( Belgium , Spain ) and the former colonies, with the primary aim of providing French companies with credit, but also aimed at increasing the presence of the To enable banking in the banking centers where new markets were developing, either to export technical know-how it had acquired in certain fields or to keep in touch with multinationals . The years 1966 and 1967 were a fundamental turning point in banking legislation: the most important development was the weakening of the separation between asset and investment banking and the establishment of a separate mortgage bank .

Société Générale took advantage of this advantage and took a leading position in some new financial techniques, primarily intended for corporate business, such as finance leasing , by creating specialized subsidiaries for the respective purpose. The 1970s were characterized by two major developments: an expansion of the international branch network and the general introduction of computing to keep pace with the expansion of the customer base and the development of the investment business. The appearance of automatic ATMs in 1971 crowned the success and development of the credit card . Against the background of deregulation and technological change at the beginning of the 1980s, the internationalization of markets and the emergence of new financial instruments, Société Générale set itself two business goals: it focused on private consumers through its branch network and through the acquisition of specialized subsidiaries. She pursued and expanded her business activities on the French capital markets and in various selected international banking centers. On July 29, 1987 , Société Générale was privatized. It was selected among the three major banks nationalized in 1945 for its excellent risk management, equity ratio and productivity ratio .

ECS has been a 100% subsidiary since 1984 . ECS is active in the areas of leasing, asset management and IT services.

Since 1991

Over the past few years, Société Générale has focused on developing its business activities in three core areas by combining organic growth and further acquisitions.

With the acquisition of competitor Crédit du Nord in 1997, the retail banking business was strengthened, which demonstrated the banking group's determination to take advantage of the restructuring of the French banking system. At the same time, Société Générale tried to secure long-term customer loyalty with the offer of “ one account number for life ” and the introduction of “ Jazz ” (a package of services). In 1999, Société Générale tried to take over Paribas in a hostile manner , but the competitor Banque Nationale de Paris ultimately won.

Société générale - Expres Bank in Plovdiv , Bulgaria .

In 1998, Société Générale set up a separate department for retail banking outside France, underscoring its determination to develop this line of business into a strategic development axis for the group. This activity was strengthened in 1999 through further acquisitions in Romania ( BRD - Groupe Société Générale ), Bulgaria and Madagascar . The strategy of external growth was manifested in 2001 through acquisitions in Central Europe ( Komerční banka in the Czech Republic and SKB Banka in Slovenia ). Africa also became an important area of ​​interest for the bank in 2002 with the takeover of Eqdom - the market leader for consumer loans in Morocco - and Union International de Banque in Tunisia . In addition, 2,003 were in Ghana , 48% of SBB Bank and 2,004 in Greece 50% of General Bank of Greece and in Germany 75% of the Hanseatic Bank purchased. On June 30, 2006, the Croatian Splitska banka was taken over.

In the area of ​​specialized financial services, a department established in mid-2001, the purchase of three subsidiaries of Deutsche Bank ( ALD AutoLeasing D GmbH , which specializes in brand-independent car leasing business , the Bank German Motor Vehicle Industry GmbH , which specializes in car loans, and which specializes in the financing and leasing of mobile capital goods for companies GEFA Gesellschaft für Vertriebsfinanzierung mbH ) has put Société Générale in a position to grow in this sector on the European market. The external growth strategy was continued in 2002 with the purchase of Hertz Leasing, a European subsidiary of the Ford group that specializes in long-term leasing and fleet management .

With the success story as France's leading provider of investment products ( mutual funds , savings plans ), the group has developed its activities in asset management and private banking . With her subsidiary Société Générale Asset Management, it has been pursuing the strategy since 1999 of developing both the investment fund business in France and business activities aimed at important institutional investors at international level. With the establishment of Société Générale Asset Management UK in London and the acquisition of Yamaichi in Japan , Société Générale took a decisive step towards internationalization and is now able to offer its clients truly global fund management capabilities. Société Générale also has a global presence in private banking. After pursuing a policy of cautious acquisitions in 1998, Société Générale Private Banking developed and consolidated in 1999 against the backdrop of stiffer competition.

French reporter Denis Robert and former clearing company number 3 , Ernest Backes, accused Société Générale of unpublished accounts at Clearstream, which is at the center of a financial scandal. The bank denies the allegations made.

In the first quarter of 2004, the third pillar of Société Générale's business activities was founded with SG Global Investment Management and Services GIMS. In February 2004, SG Global Securities Services for Investors GSSI was founded, offering investors services on securities and derivatives around the world. GSSI is linked to GIMS, which brings together SG Asset Management, SG Private Banking and SG Global Security Services for Investors. GIMS employs 7,600 people.

Société Générale developed its corporate and investment business under the brand name SG Corporate and Investment Banking, introduced in 1998. Based on a solid clientele and recognized for its ability to innovate (the group ranks among the world leaders in investment derivatives , convertible bonds , export finance , etc.), Société Générale intends to expand its consulting, mergers & acquisitions and IPO business through the takeover specialized companies (Hambros in the UK , Barr Devlin and Cowen in the US ).

2008 financial crisis

On January 24, 2008, Société Générale announced in a press release that it had uncovered an exceptional fraud within its group activities. According to Société Générale, a trader who was responsible for hedging European stock indices using futures is said to have built up massive fraudulent positions beyond his competencies in 2007 and 2008. With the help of his in-depth knowledge of the control procedures, which comes from his previous employment in the middle office, he is said to have hidden these positions through a sophisticated system of fictitious transactions. According to the press release, these positions were discovered on January 19-20, 2008. It was decided to close these positions as soon as possible in the best interests of market integrity and shareholders. Due to the size of the positions and the very unfavorable market conditions, this fraud would have a negative impact of around 4.9 billion euros, which the bank will take into account in its 2007 business results. In addition, the Société Générale announced additional write-offs for the fourth quarter of 2007 in the amount of 2.05 billion euros, which can be attributed to the US real estate crisis. To strengthen the capital base, the board of directors has decided on a capital increase of 5.5 billion euros.

The dealer initially not mentioned by name by Société Générale is 31-year-old Jérôme Kerviel , who was temporarily arrested on January 26, 2008 and interrogated by the public prosecutor's office. According to a second press release by Société Générale, the fraudulent positions are said to have a nominal value of around 50 billion euros. After initial reconstructions by the public prosecutor's office, which initiated an investigation into breach of trust, forgery and the use of counterfeits, as well as breaking into an information system, there are some doubts about the version put forward by Société Générale, while the entire management and control structure of the bank is called into question . The EUREX derivatives exchange , through which most of the transactions were processed, informed the management of Société Générale about questionable positions as early as November 2007. According to official reports from the French financial market supervisory authority, Autorité des Marchés Financiers (AMF), dated January 28, 2008, board member Robert Addison Day also sold Société Générale shares worth 85.7 million euros on January 9, 2008 and January 2008 another sold worth 40.5 million euros. In this context, a group of shareholders has filed a complaint against unknown persons with the public prosecutor in Paris for insider trading . In this regard, the US Securities and Exchange Commission has SEC initiated an investigation into the investments made by Robert A. Day transactions.

On 5 October 2010, Jerome Kerviel by a French court in Paris in the first instance to five years in prison, two of them suspended on probation because of embezzlement sentenced, forgery and fraudulent manipulation. The judges saw it as proven that Kerviel carried out the speculation on his own initiative and so it came to the billions in losses. He was also sentenced to repayment of 4.9 billion euros to his former employer, Société Générale. With his current salary as a computer science consultant, the repayment would take at least 177,000 years. On October 24, 2012, a French court of appeal upheld the judgment against Jérôme Kerviel.

As can be seen in the short prospectus published on February 11, 2008 on the announced capital increase of 5.5 billion euros, the value adjustments and write-offs attributable to the US mortgage business and the subprime crisis amount to 2.6 billion euros. Just 18 days earlier, Société Générale stated a write-down requirement of 2.05 billion euros. The capital increase provides for the new shares to be offered at a subscription price of EUR 47.50, which corresponds to a price discount of 39% compared to the previous day's closing price. The offer to subscribe for new shares is only valid in France and in eight selected EU countries, including Germany. On October 6, 2009, the major bank announced that it was aiming for a further capital increase of € 4.8 billion. The Société Générale intends to use the proceeds to repay state aid and finance any acquisitions. The issue price should be € 36 per share.

Company data

year 2002 2003 2004 2005 2006 2007 2008
Sales,
in € million		 14,573 15,637 16,390 19,166 22,417 21,923 21,866
Employee 83,220 88,000 92,000 103,555 119,779 151,000 160,430

activity

Headquarters of Société Générale in La Défense near Paris

Société Générale employs around 159,000 people in 79 countries, around 60 percent of them outside France. The bank is active in both financing and investment and investment business.

In France, Société Générale, including its subsidiary Crédit du Nord, is active in the private customer business with almost 3,000 branches.

management

Daniel Bouton , Alain Juppé's former chief of staff , was Chairman and CEO of Société Générale from 1997 to 2008 . After Frédéric Oudéa took over the management of the group in 2008, he has also been Chairman of the Board of Directors since May 2009.

Stock market data

Société Générale is listed on the Euronext stock exchange in Paris and is part of the French CAC 40 index . Its market capitalization was € 35.3 billion on June 6, 2008, making it the twelfth largest listed company in France. As of December 31, 2007, Société Générale was still the tenth largest listed company in France with a market capitalization of € 46.1 billion.

criticism

In September 2010, Société Générale and ten other banks were fined 381.1 million euros by the Conseil de la Concurrence . The banks had made an agreement according to which they would charge their customers 4.3 cents check fees per check from January 2002 to July 2007 in order to generate extra profits. This affected 80% of the checks used in France. Check transactions in France were free until 2002. After the intervention of the banking regulator, which called the profits "illegal", this practice was stopped. The banks in this cartel were also fined for excessive fees totaling 3.8 million euros. Since Société Générale had already been sentenced to a penalty in 2000 for obstructing competition, their penalty was 20% higher. In the trial that began in Bonn in September 2019, the bank is accused of having illegally unpaid taxes reimbursed with Cum Ex transactions.

subsidiary company

The subsidiaries of Société Générale include:

and more than 20 other subsidiaries in the insurance and personal loan sectors.

literature

  • Hugues Le Bret: The week in which Jérôme Kerviel almost burst the world system: An inside report. Verlag Antje Kunstmann, Munich 2011, ISBN 978-3-88897-722-0 .

Web links

Commons : Société Générale  - collection of images, videos and audio files
 Wikinews: Billions lost at Société Générale  - news

Individual evidence

  1. ↑ Entry in the BIC directory at SWIFT
  2. ↑ https://www.societegenerale.com/sites/default/files/documents/Rapport-integre/integrated-report-societe-generale-2017-2018.pdf
  3. ^ Policy Measures to Address Systemically Important Financial Institutions. In: Financial Stability Board (FSB) of November 4, 2011 (PDF file; 105 kB)
  4. ↑ Update of the group of global systemically important banks (G-SIBs) (PDF; 43 kB) from November 1, 2012
  5. ↑ Press release Société Générale, January 24, 2008  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Dead Link / www.ir.socgen.com  
  6. ↑ Reuters Germany, January 24, 2008 - SocGen reveals dealer fraud - 4.9 billion debts
  7. ↑ Press release Société Générale, January 27, 2008 (PDF; 57 kB)
  8. ↑ Reuters Germany, January 28, 2008 - SocGen probably already informed about Kerviel in November
  9. ↑ Autorité des Marchés Financiers (AMF), January 28, 2008 - Société Générale, Declaration des dirigeants n ° 208D0458
  10. ↑ Autorité des Marchés Financiers (AMF), January 28, 2008 - Société Générale, Declaration des dirigeants n ° 208D0577
  11. ↑ Le Monde, January 28, 2008 - Plainte pour délit d'initié contre un administrateur de la Société générale
  12. ↑ Stock exchange gamer Kerviel to repay billions in: Spiegel Online from October 5, 2010
  13. ↑ The court finds Jerome Kerviel guilty in: Handelsblatt dated October 5, 2010
  14. ↑ Stock exchange trader Kerviel to repay five billion euros Spiegel Online, October 24, 2012
  15. ↑ Press release Société Générale, February 11, 2008 (PDF; 79 kB)
  16. ↑ Societe Generale makes capital increase of 4.8 billion euros
  17. ↑ http://www.investor.socgen.com/phoenix.zhtml?c=69575&p=irol-irHome  ; Consolidated financial statement page 119
  18. ^ Société Générale, Retail Banking in France
  19. ↑ Euronext, Historical composition of the CAC 40 index from 1987 ( Memento of the original from June 22, 2008 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.euronext.com
  20. ^ Collusion in the banking sector . Press release of the Autorité de la concurrence of September 20, 2010, accessed on February 9, 2011
  21. ↑ French banks are supposed to pay millions in: Handelsblatt of September 21, 2010, accessed on February 9, 2011
  22. ↑ The biggest tax theft in German history , Tim Bartz, Spiegel Online , September 4, 2019