SYDNEY, Jan 24 (Reuters) - The Australian unit of Societe
Generale (SOGN.PA) has closed down its securitisation division
in the wake of the U.S. subprime mortgage crisis, while
Citigroup (C.N) has also cut back its securitisation business
in Australia.
Societe Generale Australia told its staff on Wednesday it
would stop running securitisation operations in Australia,
which is the bank's hub for the Asia Pacific region.
The French bank's securitisation team of 17 will be
redeployed in other areas with a special focus on trading,
leverage and acquisition finance, and project finance including
oil and gas activities, a spokesperson said on Thursday.
"It's a global decision following the U.S. subprime
mortgage crisis, but Societe Generale as a whole is not pulling
out of the securitisation market," she added.
The spokesperson did not say which banking centers would
continue to run securitisation operations.
Societe Generale ranked fourth in the asset-backed
securities league table for Australian issuers in 2007 with
eight lead managed deals, according to Insto magazine.
Citigroup has also reshuffled its securitisation operations
in the region.
"We will continue to provide securitisation services to our
Australian clients but it will be headed out of Asia by
Cristina Chang who's based in Hong Kong," an official at
Citigroup in Sydney said.
Douglas Banks, former head of securitisation at Citigroup
in Sydney, left the bank earlier in the week, a market source
said.
Citigroup declined to confirm the departure.
The U.S. bank had just one lead managed deal in Australia
in 2007, which was its own.
Australia, where two-thirds of households own their own
home, is the world's fourth-biggest residential mortgage-backed
securities (RMBS) market after the United States, Britain and
Spain with A$57 billion issued in 2007.
RMBS issuance in Australia has been hit hard by the global
credit crisis, slumping by 76 percent in the second half of
2007, compared with the same period in 2006.
This year is not looking any better with analysts
predicting a tough period ahead as fears of a U.S. recession
deepen.
"Offshore investment banks are facing difficult conditions
in their home countries and traditionally, during hard times,
they focus on their core markets. I guess Australia happens to
be a non-core market," Nick Vamvakas, chief financial officer
at mortgage-lender Members Equity.
A handful of Australian mortgage lenders are planning to
meet with 15 to 20 Asian investors next week at a conference,
said Macquarie Bank, which is arranging the event.
The meetings are scheduled to take place in Hong Kong on
Wednesday and in Singapore on Thursday.
(Reporting by Cecile Lefort)
