PARIS (Reuters) - French bank Societe Generale and U.S. wealth manager Rockefeller Financial Services have formed an alliance in private banking, an area which has remained relatively resilient to the global credit crunch.
As part of the deal, SG Private Banking has bought a 37 percent stake in Rockefeller Financial Services, the companies said on Tuesday. The companies did not say how much SocGen had paid for the stake, but a source close to the situation said SocGen had paid "around $100 million".
The two said in a joint statement they will "share areas of expertise and jointly serve the financial needs of ultra-high net worth individuals and family offices around the world".
SG Private Banking has assets of around 71 billion euros ($109.1 billion) under management and has been one of the best-performing divisions of France's second biggest listed bank in recent months.
Rockefeller is headquartered in New York and had $29 billion of assets under management as of March 31.
Despite huge losses for banks due to problems stemming from U.S. subprime mortgages, private banking has continued to see signs of growth, especially in emerging markets.
In May, Swiss bank Julius Baer said it had seen a rising flow of deposits, while Credit Suisse announced plans to launch private banking for wealthy Chinese clients.
Earlier this month, Liechtenstein private bank VP Bank said it aimed to pull in 3 billion Swiss francs ($2.9 billion) worth of net new funds from wealthy clients this year as it expands its Asian arm.
Last year, SocGen's SG Hambros division bought ABN AMRO Private Banking London.
SocGen is trying to battle back from a 4.9 billion euro loss disclosed in January which the bank said was caused by rogue deals carried out by Jerome Kerviel, a 31-year-old trader.
Kerviel was freed from prison in March after an appeal against his detention but he remains under formal investigation for breach of trust, computer abuse and falsification.
The incident prompted SocGen to raise 5.5 billion euros from a rights issue to shore up its capital position.
SocGen shares were up 3.96 percent at 60.45 euros in mid-morning trade, among the top gainers on France's benchmark CAC-40 index.
"The deal with Rockefeller is a small, positive announcement but it doesn't change the fundamentals," said Stratege Finance fund manager Valerie Cazaban, who holds SocGen shares in her portfolio.
"The fundamentals remain that the banking sector overall has had problems and is likely to face further problems in future," she said, referring to banks' losses due to the credit crisis.
SocGen shares have fallen by around 33 percent since the start of 2008, underperforming a 25 percent decline in the DJ Stoxx European banking sector.
(Editing by Sue Thomas and Jason Neely)