SocGen customers take scandal in their stride

By Brian Rohan

PARIS (Reuters) - Societe Generale customers took news of one of the biggest ever cases of banking fraud in their stride on Thursday, confident that authorities would step in to protect savers if their bank were in trouble.

Lunch-hour clients strolled leisurely up to the central Paris office of France's second-largest listed bank, which on Thursday blamed a rogue trader for 4.9 billion euros ($7.18 billion) in losses, and the U.S. subprime mortgage crisis for a further 2 billion euro write-down.

The short teller lines and blas clientele made for a Paris street scene very different from the havoc and overnight cues that drove last autumn's bank run on Britain's Northern Rock.

"I know I'm safe -- this is one of France's biggest banks," said Chang Nguyen, 47, an IT worker leaving the bank's gilded, turn-of-the-century personal banking headquarters located between the Opera house and Galeries Lafayette department store.

"Besides, I'm sure the government would intervene if it was in trouble," he added.

Both the Bank of France and the government have sought to soothe fears over the bank, pointing to the capital increase it had announced to shore up its finances and declaring it a solid institution. The share closed down by just over 4 percent.

If proven, the fraud would be the largest amount ever lost in a trading scandal worldwide. On the street in Paris, people were critical of banks' security systems and shocked at the sum.

"This isn't anything new... shouldn't they have learned by now?" said deliveryman Albert Jourdan, 50.

"I'm not shedding any tears for them," he said.

Stepping out of the Societe Generale branch in central Paris, 35-year old Leonard Renard, a financial sector IT worker, said knowledge of a bank's information systems would be key to a rogue trader.

"It had to be someone from the back office with inside IT knowledge," he said with a smile.

Renard was not worried about his savings because the consumer branch of the bank was well insulated from the capital markets departments, he said.

But he did express some sympathy for the prime suspect, who according to banks director is an equities trader who earns less than 100,000 euros a year. The trader is currently missing.

"It's a funny coincidence that the bank announces the fraud on the same day it shows subprime losses -- I wonder if he's a fall guy for a whole packet of screw-ups," he said.

But even this wouldn't push Renard into selling his shares in the bank, he said, which he expected to recover.