Societe Generale SA plans to focus its investment bank more on corporate banking as Chief Executive Officer Frederic Oudea attempts to turn the unit around following steep trading losses on complex derivatives last year.
The Paris-based lender on Monday said the business, which is heavily geared toward markets activities, will pursue a “client-centric” strategy and allocate more capital to financing, advisory and transaction banking. The division, known as Global Banking and Investor Solutions, also set a profitability target for a return on normative equity of more than 10% from 2023.
Oudea, one of the longest-serving bank CEO’s in Europe, is joining peers including Deutsche Bank AG in emphasizing corporate banking to reduce reliance on volatile trading. The markets business, SocGen’s one-time powerhouse, plunged the bank into its first annual loss in more than three decades after derivatives linked to dividends blew up at the onset of the pandemic.
SocGen rose 2.2% at 9:53 a.m. in Paris trading, bringing gains this year to almost 50%, one of the best performers among European banks.
