SocGen Reshuffles Top Management as Oudea Names Four Deputy CEOs
(Bloomberg) -- Societe Generale SA named four deputies to Chief Executive Officer Frederic Oudea, ending weeks of uncertainty after Didier Valet left the bank as part of an effort to resolve U.S. legal issues.
Severin Cabannes will take charge of Valet’s investment-banking activities, with Chief Financial Officer Philippe Heim promoted to deputy CEO responsible for international retail operations, the bank said in a statement. Diony Lebot, currently chief risk officer, will be elevated to deputy CEO in charge of compliance with Philippe Aymerich overseeing French retail-banking activities.
SocGen, a global leader in equity derivatives, is reshuffling top management roles after Valet, an 18-year veteran at the French bank, stepped down in mid-March. The departure of the executive -- widely seen as a potential successor to Oudea as CEO -- was part of an effort to settle a U.S. Justice Department investigation into the bank’s alleged manipulation of interest-rate benchmarks, people with direct knowledge of the matter said at the time.
“After Valet’s departure there was a need to reshuffle the bench and that’s what they’ve done,” said Jonathan Fearon, a fund manager at Aberdeen Standard Investments in Edinburgh. “The question remains how much autonomy each of these deputy CEOs will have and how much authority will remain with the CEO.”
As part of the changes, first reported by Bloomberg, William Kadouch-Chassaing will become the bank’s new chief financial officer, replacing Heim, while Sylvie Remond becomes chief risk officer. The board also proposed Oudea will remain as CEO for a further four years and said that deputy CEO Bernardo Sanchez Incera will leave the bank.
SocGen said at the time of Valet’s departure that the bank aimed to resolve the U.S. probes in weeks. It’s now nearing an agreement to pay as much as $1 billion to resolve two investigations -- into the rigging of benchmark interest rates and allegations of bribery in Libya -- people familiar with the matter said. The settlement deals with the U.S. Justice Department could be announced as soon as this week, they said.
SocGen fell as much as 1.4 percent in Paris and closed down 1.1 percent to 44.90 euros in Paris trading.
While the lender said the final settlement tab hasn’t yet been determined, it had set aside 2.3 billion euros ($2.8 billion) for legal risks at the end of December. About 1 billion euros of that total is allocated to the interest-rate and Libya probes, the bank said.
In May 2017, SocGen agreed to pay more than $1 billion to the Libyan Investment Authority to resolve a U.K. civil dispute over the alleged bribery. One of the former bankers on the Libyan transactions reached a deal with the Justice Department to cooperate with its bribery investigation of the bank.
The investigation of SocGen’s rate submissions grew out of a broader probe into whether global banks had fudged the daily borrowing data they provide to calculate benchmarks including Libor, which stands for the London interbank offered rate and helps determine mortgage and credit-card rates.
Documents collected by the U.S. suggest that SocGen executives were aware that its bankers were submitting fake U.S. dollar Libor rates, people familiar with the matter told Bloomberg last year. Such misleading numbers, which made bank borrowing costs look lower than they actually were, have been the focus of years of U.S. and European investigations, charges against more than a dozen bankers and brokers, and more than $2 billion in U.S. criminal penalties.
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