SG's long-time CEO Oudea to step down

IFR 2434 - 21 May 2022 - 27 May 2022
3 min read
EMEA
Christopher Spink

Frederic Oudea is to step down as chief executive of Societe Generale after 15 years in the position. His current term expires at next year’s annual general meeting, and Oudea told this year’s meeting he would not seek to renew it.

Chairman Lorenzo Bini Smaghi said the board hoped to have a candidate to replace Oudea ready for approval at the next AGM, scheduled for May 2023. The board said it expects Oudea to lead the French bank until then.

Oudea spent eight years in the French finance ministry before joining SG in 1995, initially as deputy head of corporate banking in London. He was then appointed head of global supervision and development in equities, before becoming deputy chief financial officer in 2002 and chief financial officer the following January.

His reign as chief executive started in May 2008, the same year the bank lost nearly €5bn from a series of rogue trades by Jerome Kerviel. SG, like other banks, has faced a series of scandals since the financial crisis of that year too.

The bank was involved in a cartel to fix Euribor, for which it paid a €446m fine in 2014. It paid US$1.4bn in late 2018 in a settlement with US authorities following accusations it dodged sanctions against Cuba and other countries. Earlier in 2018, the bank had also paid US$1.3bn to US and French authorities over transactions with Libya and rigging Libor.

The bank’s performance improved last year, after making losses on structured equities in the first half of 2020. But it has been hit by the invasion of Ukraine by Russia, forcing it to sell Russian subsidiary Rosbank to previous owner Vladimir Potanin’s Interros Group.

That transaction was completed last week and has resulted in a €3.2bn loss for SG. After its closure, Potanin told Interfax he did not anticipate any further deals. “We are not planning any further acquisitions in the banking sector. We will focus on Rosbank and on improving its portfolio, technology, client focus and sustainability.”

Kazim Andac, analyst at Deutsche Bank, welcomed the “relatively orderly exit from Russia” saying it improved the bank’s risk profile and removed “an overhang which prevented the reflection of solid underlying performance in Q1 to the share price performance”.

SG’s shares are down 17% this year to €25. They have plunged 65% from their level of €72 just before Oudea took over.

In the first quarter of this year SG's financing and advisory arm outperformed peers with a 24% rise in revenues to €790m. The investment banking division's revenues rose 18% to €2.76bn.

Oudea is also a director of consultant Cap Gemini.

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