(Full story)
By Lionel Laurent and Christian Plumb
PARIS, Jan 10 (Reuters) - Societe Generale's freshly overhauled management team is promising more pain for its investment bank unit this year, sounding a deeply pessimistic note likely to be echoed by rivals in France and elsewhere in Europe.
The news that France's second-biggest lender is eyeing a "significant" fall in investment banking revenue for 2012 and has decided to exit or deeply cut several businesses is the latest dollop of pain for investment banks worldwide after businesses such as debt and equity capital markets were hammered last year.
For SocGen's domestic rivals BNP Paribas and Credit Agricole, SocGen's plan to drastically scale back in areas like property and shipping finance and physical energy trading, could offer a roadmap for further retreats on what used to be key business lines.
The French banks' erstwhile empire-building designs in particular have been throttled in recent months by an evaporation in dollar funding as U.S. investors spooked by the euro zone crisis have dashed for the exits.
But the cutbacks at SocGen, which recently brought in a new chief financial officer formerly at rival Credit Agricole and replaced its corporate and investment banking chief, also reflect a grisly environment for investment banks worldwide as once reliable businesses such as stock issuance have dried up.
"Today, they're preparing for an environment in which funding is harder and harder to come by, and it's as a direct result of that that they're restructuring," said Francois Chaulet, a fund manager at Montsegur Finance in Paris, which owns shares in both SocGen and BNP Paribas.
"At the same time, you have markets and an economy which are depressed, and thus there's not very much top-line growth potential for the investment banks."
By Lionel Laurent and Christian Plumb
PARIS, Jan 10 (Reuters) - Societe Generale's freshly overhauled management team is promising more pain for its investment bank unit this year, sounding a deeply pessimistic note likely to be echoed by rivals in France and elsewhere in Europe.
The news that France's second-biggest lender is eyeing a "significant" fall in investment banking revenue for 2012 and has decided to exit or deeply cut several businesses is the latest dollop of pain for investment banks worldwide after businesses such as debt and equity capital markets were hammered last year.
For SocGen's domestic rivals BNP Paribas and Credit Agricole, SocGen's plan to drastically scale back in areas like property and shipping finance and physical energy trading, could offer a roadmap for further retreats on what used to be key business lines.
The French banks' erstwhile empire-building designs in particular have been throttled in recent months by an evaporation in dollar funding as U.S. investors spooked by the euro zone crisis have dashed for the exits.
But the cutbacks at SocGen, which recently brought in a new chief financial officer formerly at rival Credit Agricole and replaced its corporate and investment banking chief, also reflect a grisly environment for investment banks worldwide as once reliable businesses such as stock issuance have dried up.
"Today, they're preparing for an environment in which funding is harder and harder to come by, and it's as a direct result of that that they're restructuring," said Francois Chaulet, a fund manager at Montsegur Finance in Paris, which owns shares in both SocGen and BNP Paribas.
"At the same time, you have markets and an economy which are depressed, and thus there's not very much top-line growth potential for the investment banks."
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