UPDATE 1-SocGen talks with regulator over chairman-CEO role split
* New bank law asks for separation of powers
* SocGen the only major EU bank to combine both roles
* French regulator says may exempt small or niche lenders
* Activist fund Phitrust says SocGen will have to split
By Lionel Laurent and Matthias Blamont
PARIS, Jan 30 (Reuters) - Societe Generale, France's No. 2 listed bank, said on Thursday it was in talks with the French regulator over how and when to apply EU-wide legislation that would require it to split the roles of chairman and chief executive.
SocGen is the only major European bank led by a combined chairman and CEO, Frederic Oudea, who has in the past defended this structure as the best solution for the bank during times of crisis.
However, while the bank has successfully managed to resist pressure from activist investors such as PhiTrust and Hermes to split the roles, new EU-wide legislation designed to better regulate banks and protect taxpayers demands that the two roles be kept separate. The directive came into force this month.
"We are in contact with the ACPR (France's banking and insurance regulator) to examine the methods and the timetable for applying the European directive," a SocGen spokeswoman said in an e-mailed statement.
"Any change over time in the governance of the group will be considered in an organised fashion and respect best practices with regard to corporate governance."
A spokeswoman for the ACPR declined to comment specifically on SocGen but made clear that there would only be very few exceptions made for small or niche lenders.
"We allow exceptions in two cases: either according to proportionality or size, so for small-sized banks depending on their structure or their scope...Or otherwise an exception that simply grants a delay to give the bank time to prepare its reorganisation," the spokeswoman said.
SocGen is unlikely to get an exemption based on size, banking sources say. It is deemed a systemically important bank by the Financial Stability Board, on a par with Spain's Banco Santander and Natixis parent BPCE, and has a 1.25 trillion-euro ($1.71 trillion) balance sheet.
"I think they (SocGen) will have to split the roles now, either that or resort to all kinds of complicated gymnastics," said Denis Branche, CEO of PhiTrust, who has for years called for a separate chairman and CEO to limit the risk of abuse of power.
He said that the possible split was unlikely to involve a simple promotion of SocGen's Vice-Chairman, Anthony Wyand, because his term, which began in 2002, was set to end in 2015.
A Paris-based banking source said that the French regulator had contacted lenders about this rule back in mid-2013, so the change was unlikely to come as a surprise.
"All the banks were warned and they have known about this for a while," he said. ($1 = 0.7329 euros) (Editing by Elaine Hardcastle)