Société Générale Corporate & Investment Banking plans to realign its foreign exchange business within a new Fixed Income, Currencies and Commodities (FICC) division early next year.
Following in the footsteps of other heavyweights, including Merrill Lynch, which set up a FICC business this summer (Profit & Loss, September 2006), the French bank will create the investor-focused division to combine integrated engineering capabilities and a sales force to ensure the seamless distribution of both flow and structured products.
The FICC division will comprise structuring – engineering, structured interest rates – FX and credit products, securitisation, and portfolio management – aswell as fixed income and FX sales and trading, treasury activities and commodities products.
The move is part of a major initiative by the bank to consolidate a client and solution-driven business approach across asset classes and by client segment.
Entitled “Step up 2010”, the project will be implemented early in 2007, subject to the consultation with worker councils, the bank says.
Besides the formation of the FICC, SG CIB will create three other divisions. Two are business solutions divisions and incorporate an issuer-focused integrated Capital Raising and Financing division to work across the equity-debt continuum. This will include capital market activities, structured finance – export, infrastructure & asset-based, natural resources, and real estate finance, and hedging – interest rate and FX derivatives.
The other business solution division will be an investor-focused Global Equities and Derivatives Solutions business regrouping cash equity sales and research and equity derivatives, while preserving the independence of research.
SG CIB will also create a client coverage division offering all of the bank’s services, and will also include the M&A advisory team and the financial sponsor coverage team.
The new four pronged structure will replace the current model, which is based on two divisions covering corporate banking and fixed income, and equity and advisory.
“We are convinced that the new target organisation will fully align Société Générale Corporate & Investment Banking with the way our clients think and grow their business,” says Jean-Pierre Mustier, CEO.
“Retaining our strategy, but further boosting our business model, is designed to anticipate client and market trends such as issuers looking for more integrated solutions, investors looking for improved service and innovation, and increased disintermediation,” he adds. “It will ensure that we are well positioned to outperform in all economic and market conditions”.