Societe Generale CIB

Société Générale is one of the largest financial institutions in Europe. It has an active investment banking arm that is commonly called SocGen or SG CIB.

Societe Generale was founded in 1864 as a commercial bank to fund French industry. It moved into investment banking in 1871 in order to help the French government raise enough money to pay off the indemnity that they needed to pay off as a result of the Franco-Prussian war. Unlike many other French banks Société Générale has a very strong commercial and investment banking tradition, and it also has been privately owned throughout its history which means that it is more comfortable in the highly profit driven world of commercial and investment banking.

Societe Generale today also has a strong branch network in France. There are 2,700 branches throughout France. The company also owns the regional bank Credit de Nord which it acquired in 1997.

Societe Generale is an international bank with a presence in more than 70 countries. This is especially true in Southern and Eastern Europe and North Africa where there are strong retail branch networks. It also has presence in India, Ghana, Lebanon, Belgium and Brazil. It employs more than 120,000 people around the world, with around 75,000 employees in Europe. Société Générale is the third largest bank in the Eurozone and the sixth largest company in France (at least by market capitalization).

Société Générale CIB, with a combination of a strong branch network and a deep tradition of investment banking has been uniquely placed to become one of the leading asset managers in France, being able to both attract provincial wealthy customers and to offer them a full investment service. It has also used the same combination of factors to establish a strong presence in private banking. It has acquired a number of small fund managers in other countries, including the UK and Japan, and aims to provide a global asset management capability.

SG CIB - the investment banking arm is the third largest investment banking operation in the Eurozone, but as London is outside the Eurozone this only means that Société Générale is a medium sized player in this market. The corporate and investment banking division is active in 45 countries, although most of these have a small presence. Like many mid-sized commercial and investment banks Société Générale has a number of specialities that it offers, in its case these are derivatives, structured finance and Euro capital markets.

The investment banking arm is known as Société Générale Corporate and Investment Banking (CIB) in France although outside France, particularly in English speaking countries where there is not much of a branch presence its investment banking capability is usually simply known as Société Générale and called SocGen. It has recently acquired a number of boutique and recognised names in the UK with the purchase of SG Hambros and the US with the acquisition of Barr Devlin.

Despite its mid-sized status and its non American base Société Générale has been more involved than many other banks in some of the more important news stories in the credit crunch. In January 2008 it seems that Société Générale was on the brink of failure when it was announced that a single junior trader had managed to lose $7.2 billion, the largest loss of this kind in history. It was also named as one of the largest beneficiaries of the US government’s bailout of AIG, the credit default swap insurer, which raised a minor political storm due to the fact that Société Générale was not an American firm and employed very few Americans and invested very little in America.