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Societe Generale: the French and international bank.

Among France's three major commercial banking groups, Societe Generale boasts the highest banking income per employee, as well as the highest returns, whether these be measured relative to shareholder's equity or balance-sheet total. Net assets per share, revalued as of June 30, 1991, come to FF696, while the share was trading at just FF533 on February 5, 1992. Dividends have been consistently high, averaging 26 per cent of net earnings.

Founded in 1864 and nationalized in 1945, Societe Generale returned to the private sector in July 1987. Today, it is France's largest private-sector bank, with nearly 520,000 shareholders. Market capitalization amounts to approximately FF 34.8 billion, the 11th highest on the Paris Bourse (as of December 31, 1991). Societe Generale is also Europe's seventh largest commercial bank in terms of balance sheet total-FF 1,243 billion as of June 30, 1991 and ranks 19th worldwide. Staff totals 45,782, including 7,000 employees outside France.

A diversified group, Societe Generale is built around a domestic network comprising 2,000 outlets with four million customers, of which one million have securities accounts. These are rounded out by numerous branches and subsidiaries abroad, operating in a variety of different areas.

Societe Generale has a long tradition of corporate banking and currently has business links with large French groups, multinational groups, as well as other companies of all sizes. Its experience in this field made it a natural choice as advisor for the privatization of diversified media group Havas and engineering group CGE (now Alcatel Alsthom). It has sizeable interests in a number of major French business, among them hotel group Accor, Alcatel Alsthom, pay-TV channel Canal +, utility group Generale des Eaux, Havas, diversified holding company Navigation Mixte, Perrier, Peugeot, Michelin, department store operator Le Printemps, Nouvelle Galleries, La Redoute and Rhone-Poulenc. Its long-term investments in industry are valued at FF 19 billion.

Outside France, Societe Generale is represented by 500 branches and subsidiaries, of which 93 are in Europe. The first foreign branch opened in London in 1871 and business abroad has kept pace with international developments ever since. Recent moves include purchases of a bank in South Africa and a merchant bank in China and since 1989 the group has also been present in former East Germany, Romania and Hungary. German operations have been reinforced with branch openings in Berlin, Dresden and Leipzig and banking subsidiaries have been set up in Czechoslovakia and Yugoslavia. Alongside its traditional banking business, Societe Generale is also a major contender in a number of newer areas including fund management, leasing and Mergers and Acquisitions.

Societe Generale currently manages some 70 investment funds. Following its acquisition of Touche Remnant, a major UK fund manager with complementary expertise, it has set up Societe Generale Touche Remnant Asset Management to coordinate Societe Generale's fund management activities in France, the UK, the US, Germany and Italy. This holding company also has plans for expansion into other parts of Europe, notably Spain and Greece. As of June 1991, Societe Generale Touche Remnant Asset Management managed FF257 billion in assets, making it one of Europe's largest investment fund operators.

Societe Generale was also the first French bank to take advantage of changes in legislation and buy a seat on the Paris stock exchange through brokerages Delahaye Ripault, in which it currently has a 94.38 per cent interest. Customers benefit from the best in technology, in particular Societe Generale's value-added videotex home-banking services which have attracted an unusually high number of subscribers. Societe Generale has also installed 1,330 on-line cash distributors, a tenth of the total in France and cards issued have recently topped the two-million mark.

Societe Generale is a major player in leasing, ranking first in Europe. Subsidiaries Sogebail and Sofinabail are French leaders on their respective markets, properly and equipment leasing, while Sogelease is one of the world's top general leasing networks. In recent years, Societe Generale has also become an active player in foreign exchange, treasury management, French bond market, Eurofranc issues and equities.

Business abroad has expanded rapidly, notably in derivative securities. Worldwide, the group currently ranks fourth in options-and number one in France, where it accounts for 40 per cent of the market (first in exchange-rate options and first in equity warrants). Options business is truly global, with a revolving book that allows 24-hour trading. Turning to futures, subsidiary Fimat is a top trader on France's Financial Futures Market Matif and is present in all the world's major financial centres. Societe Generale is also increasingly involved in international Mergers and Acquisitions. It has bought an interest in American Mergers and Acquisitions specialist Lodestar and participated in French group Schneider's acquisition of Square D in the US. As of December 31, 1991, shareholder's equity amounted to FF37 billion setting its Cooke ratio at 9.05 per cent.

Among France's three major commercial banking groups, Societe Generale boasts the highest banking income per employee, as well as the highest returns, whether these be measured relative to shareholder's equity or balance-sheet total. Net assets per share, revalued as of June 30, 1991, come to FF696, while the share was trading at just FF533 on February 5, 1992. Dividends have been consistently high, averaging 26 per cent of net earnings. The branch in Karachi, which was declared a scheduled Bank in November 1991, is known as SOCIETE GENERALE THE FRENCH AND INTERNATIONAL BANK. Societe Generale offers to its customers a wide range of services including Direct Financing, Trade Financing, Guarantees, Transfers, Letters of Credit and Foreign Currency Accounts.

Of special interest to corporate entities in Pakistan, would be the access to the worldwide network of SOCIETE GENERALE group. The high rating given to Societe Generale by rating agencies provides corporate customers with access to a first class signature and comfort to the depositors.

The bank is therefore able to offer very competitive and efficient services in the fields of international trade financing. This is reflected by the fact that in August 1992 SOCIETE GENERALE was mandated, from amongst seven banks, by the Ministry of Finance, Government of Pakistan, as the financing institution for the US$ 135 million Concessionary Finance Facility of the US Eximp Bank. This facility is available for the Private Sector Energy Development Program for drawdown over four years and repayment over twelve years. The fact that SOCIETE GENERALE was also one of the banks short listed by the US Eximp Bank is indicative of it's truely international status. It also underlines the multisourcing capability of SOCIETE GENERALE for International Trade Financing requirements of it's customers around the world.
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Author:Delbos, Claude
Publication:Economic Review
Article Type:Cover Story
Date:Nov 1, 1992
Words:1095
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