Wealth Management

SocGen plans to save $660 million at its Paris Headquarters

Societe Generale's Paris Headquarters/Bloomberg

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Despite a rebound this month, SocGen is still down about eight per cent in 2019, faring worse than a 1.3 per cent decline in Europe’s Stoxx 600 banking index.

Wednesday 11, September 2019

Societe Generale is studying ways to save EUR 600 million ($662 million) in annual costs tied to its operations in Paris, part of an effort to win back investor confidence and improve returns, reported Bloomberg.

The review, known internally as ‘Ithaque’ started in June. No decision has been made and the savings target may still change, said the person, asking not to be identified because the matter is confidential.

Chief Executive Officer Frederic Oudea is under pressure to go beyond existing cost cuts amid an economic slowdown and the prospect of even lower interest rates. The new reductions would focus on Paris support functions and add to an ongoing restructuring that aims to save EUR 500 million and eliminate 1,600 jobs, mainly in the investment banking unit.

Oudea, more than 10 years in the job, is slashing costs and selling assets after a surprise profit warning in January. He wants to preserve the bank’s leadership in businesses such as equity derivatives while strengthening capital.

SocGen has hired Bain & Co. to help identify ways to slash expenses by about a fifth on services such as information technology, human resources and the finance department. The review might lead to hundreds of additional job cuts in Paris.

The firm is also working with McKinsey & Co. to find ways to bolster its key capital level and keep up with regulatory demands in a review known internally as ‘Optica’.

Oudea has also been exploring sales of assets. SocGen is considering options for its Lyxor asset-management business, which oversees about EUR 151 billion. The company is also weighing exits from its UK private banking business and Nordic equipment-leasing operations, last year, the lender agreed to sell its Belgian private banking unit to ABN Amro Group.


TAGS : Societe Generale, Ithaque, McKinsey & Co., Bain & Co. , ABN Amro Group, Lyxor

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