Citerne may get top SG job, some call for outsider

PARIS (Reuters) - Societe Generale co-Chief Executive Philippe Citerne is a leading contender to replace Daniel Bouton if he quits as chairman of the French bank, but some say an outsider may be better in the long term.

"They (Socgen) are going to prefer getting someone from within the company," said fund manager Arnaud Scarpaci at Agilis Gestion. "In the short term, Citerne might be the best solution," he added.

Another Paris-based fund manager who holds SocGen shares said bringing in an outsider might restore confidence in the scandal-hit bank better than sticking with someone from within the bank.

"It's going to be difficult for an outsider, but maybe that's the price they have to pay to restore investor's confidence," said the fund manager, who declined to be named.

For a long time, SocGen had been grooming its investment banking chief Jean-Pierre Mustier as heir apparent to Bouton.

However, Mustier has been tarnished by the scandal arising from 4.9 billion euros ($7.2 billion) of losses caused by unauthorized trading by 31-year old dealer Jerome Kerviel.

Some preferred SocGen to make a bolder move and hire someone from outside the bank immediately if Bouton goes.

"They're all responsible for the mess," said a Switzerland-based fund manager, who declined to be named. "To solve it, you probably need someone from the outside."

MORE PROBABLE

A Frankfurt-based analyst at a British investment bank

agreed "an outsider might be more probable."

However, analysts and fund managers said there were no obvious names in the frame for an external candidate to get the top job at the 144-year old French bank, which traditionally promotes people from within.

SocGen first announced the trading losses on January 24. It said both Bouton and Mustier had offered their resignations, but that the board had rejected this as it wanted them to stay on and sort out the situation.

Bouton told Europe 1 radio station on January 28 his resignation offer "remained on the table."

Since then, Bouton has been criticized by many leading French politicians.

President Nicolas Sarkozy has said SocGen management must face up to their responsibilities. Francois Hollande, leader of France's opposition Socialist Party, told Europe 1 radio on Tuesday that Bouton's fate "had been sealed."

SocGen is due to hold a board meeting on Wednesday and some traders and analysts say Bouton's position might become clearer after then.

"SocGen is not in a comfortable situation regarding finding a replacement for Bouton," said Michel Dumoulin, fund manager at Banque Martin Maurel in Paris, whose portfolio includes SocGen shares.

"Citerne is not ideal. He could act as a caretaker head in the short term. But it would not be a good long-term solution."

(Editing by David Holmes)