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SocGen boss sticks with standalone strategy
PARIS (Reuters) - Daniel Bouton, the head of French bank Societe Generale (SOGN.PA) reeling from a trading scandal, said he would continue with the bank's standalone strategy and that this would create the best value for shareholders.
"The board has asked me to manage this crisis, the board has asked me to continue with the development of this bank and that is what I am doing," he told Reuters, also saying that he had a "clear mandate" for this.
"I am completely determined to continue with our strategy because, even taking into account our very bad year in 2007 due to the financial crisis and this fraud, it's this strategy which creates and will create the most value for shareholders," he added.
"This is my opinion, and it's one that's backed by the board."
Executive Chairman Bouton said he would not comment on market speculation that SocGen's trading losses have made it a bid target. Many analysts have said that France's biggest listed bank BNP Paribas (BNPP.PA) might bid for SocGen.
Asked whether SocGen could announce further writedowns linked to the global credit crunch, Bouton replied that the writedowns which SocGen have announced so far were based on some of the banking sector's "most conservative" estimates.
Bouton reiterated that SocGen's corporate and investment banking arm would account for 25 percent of the group's risk weighted assets by 2010 compared to 28 percent at the end of 2007.
Some analysts have said that SocGen's targets for a return on equity of 30 percent for its corporate and investment banking arm in 2009 are optimistic, but Bouton was confident that SocGen would still be among the most competitive in its industry.
Bouton declined to comment directly on losses built up by trader Jerome Kerviel or criticism of the bank's risk control systems by Bank of France Governor Christian Noyer, saying it was a matter for a board committee set up to investigate.
The committee's report, published on Wednesday, said the bank lacked controls which could have identified the loss-making positions earlier.
(Reporting by Yann Le Guernigou and Sudip Kar-Gupta)
