SG to expand structured products despite crunch

GENEVA (Reuters) - Societe Generale (SOGN.PA) said it plans to expand its structured products unit and added that demand for such complex financial instruments remained robust despite problems during the recent global credit crisis.

"The goal is to extend the organization and this model," Nicolas Cagi Nicolau, SG global head of structured products solutions, told the Reuters Wealth Management Summit.

"The trends in SG private banking are definitely good," he added.

The structured products offered by SocGen, France's second-biggest listed bank, give clients exposure to several asset classes, such as equities, commodities, cash, bonds and real estate.

Cagi Nicolau said these could take the form of an EMTN (European Medium Term Note) or products that allow customers to bet on prospects of the Japanese real estate market compared to the American property market.

However, such complex financial instruments were at the forefront of the recent stock market slump as losses in the U.S. subprime mortgage market spilled over into other areas such as collateralized debt obligations (CDOs).

Cagi Nicolau said his business had suffered along with the rest of the sector during the market turmoil of August and September, but not as much as SocGen's rivals.

"Of course we suffered. I will not say the opposite. But we didn't suffer so much when compared to the benchmark."

"We had some products which went down, definitely. But when it has been well sold, clients feel comfortable with that."

BACKING CALL FOR MORE REGULATION

Cagi Nicolau said SocGen had kept in regular touch with clients during the third quarter's market turbulence and supported calls from many of the world's top politicians for better regulation in the industry.

"During all of this period, we sent a lot of alerts, a lot of information notes to the clients. On more than 500 products, we sent a paper document of information to the clients."

Cagi Nicolau said that within the Societe Generale group, private banking and wealth management remained one of the bank's main priority areas.

"We launched 8 billion euros worth of structured products this year and 50 billion euros worth of options. Twenty thousand orders were executed through our structured products desk."

Last month, SocGen announced it had bought the London-based private banking business of Dutch bank ABN AMRO AAH.AS for an undisclosed sum.

Cagi Nicolau said good acquisitions were rare within the private banking sector but added that SocGen was open to other opportunities.

"I know our top management is working hard to find good opportunities."