* New bank law asks for separation of powers
* SocGen the only major EU bank to combine both roles
* French regulator says may exempt small or niche lenders
* Activist fund Phitrust says SocGen will have to split
By Lionel Laurent and Matthias Blamont
PARIS, Jan 30 Societe Generale,
France's No. 2 listed bank, said on Thursday it was in talks
with the French regulator over how and when to apply EU-wide
legislation that would require it to split the roles of chairman
and chief executive.
SocGen is the only major European bank led by a combined
chairman and CEO, Frederic Oudea, who has in the past defended
this structure as the best solution for the bank during times of
However, while the bank has successfully managed to resist
pressure from activist investors such as PhiTrust and Hermes to
split the roles, new EU-wide legislation designed to better
regulate banks and protect taxpayers demands that the two roles
be kept separate. The directive came into force this month.
"We are in contact with the ACPR (France's banking and
insurance regulator) to examine the methods and the timetable
for applying the European directive," a SocGen spokeswoman said
in an e-mailed statement.
"Any change over time in the governance of the group will be
considered in an organised fashion and respect best practices
with regard to corporate governance."
A spokeswoman for the ACPR declined to comment specifically
on SocGen but made clear that there would only be very few
exceptions made for small or niche lenders.
"We allow exceptions in two cases: either according to
proportionality or size, so for small-sized banks depending on
their structure or their scope...Or otherwise an exception that
simply grants a delay to give the bank time to prepare its
reorganisation," the spokeswoman said.
SocGen is unlikely to get an exemption based on size,
banking sources say. It is deemed a systemically important bank
by the Financial Stability Board, on a par with Spain's Banco
Santander and Natixis parent BPCE, and has a
1.25 trillion-euro ($1.71 trillion) balance sheet.
"I think they (SocGen) will have to split the roles now,
either that or resort to all kinds of complicated gymnastics,"
said Denis Branche, CEO of PhiTrust, who has for years called
for a separate chairman and CEO to limit the risk of abuse of
He said that the possible split was unlikely to involve a
simple promotion of SocGen's Vice-Chairman, Anthony Wyand,
because his term, which began in 2002, was set to end in 2015.
A Paris-based banking source said that the French regulator
had contacted lenders about this rule back in mid-2013, so the
change was unlikely to come as a surprise.
"All the banks were warned and they have known about this
for a while," he said.
($1 = 0.7329 euros)
(Editing by Elaine Hardcastle)