SocGen traders buy (some) time from scary new CEO’s wrath
Société Générale posted Q2 results today, and they’re… Well, they’re pretty good, believe it or not.
The surprise is warranted. The bank’s traders have been poor performers compared to rivals for a few years now, raising some awkward questions for new CEO Slawomir Krupa, who's been asking them on behalf of Chairman Lorenzo Bini Smaghi.
For the time being, at least, today’s results might make this unnecessary. Compared to European peers, the bank has done well. Quarter-on-quarter, SocGen's fixed income, currencies, and commodities (FICC) revenues were ahead of the pack with an increase of 16%. Barclays, BNP Paribas, and Deutsche Bank posted declines of 22%, 18%, and 10% respectively.
Half on half, the French bank was also strong, although Bank of America proved to be the top performer in FICC revenue in the first half. However, SocGen managed to “only” lose 0.2% of last year’s revenue, better than Deutsche (down 14%), Barclays (down 6%) and BNP (down 3%). Deutsche and BNP don’t have equities businesses, but compared to Barclay’s 49% down, SocGen’s 12% decline is positively… Positive.
Krupa, meanwhile, is the monster on the hill for the bank’s poor performers. He’s due to lay out his plan for the bank sometime this autumn, and based on his previous track record as SocGen’s head of investment banking, he’ll be “cutting costs and addressing trading risks,” says Reuters. He's also known to be much more aggressive in his approach than historic SocGen executives.
Krupa has been with SocGen for most of the last 26 years (there was a brief interval between 1999 – 2002 where he became a fintech founder in Eastern Europe). He’s been with the corporate & investment bank since 2007, slowly climbing up the ladder before being made head of investment banking in 2021, and CEO of the group in 2023.
SocGen doesn't find it easy to fire poor performers - at least not in France, where it offers colossal severance payments for workers to persuade them to leave of their own accords.
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