As a reminder, Credit Suisse isn't the only European megabank that's shifting away from the volatile trading business despite the boom in trading revenue seen across the industry over the last year. And it's also not the only major European bank that's seeingtop traders head for the exits.
Societe Generale just saw its top trading executive quit as CEO Frederic Oudea continues to shift the bank's focus away from the trading business in the wake of steep losses that SocGen booked during last year's market upheaval.
Global markets head Jean-François Grégoire is leaving the job, to be replacd by Sylvain Cartier and Alexandre Fleury, who will jointly run the unit, SocGen said in a statement on Tuesday. Cartier will keep his current responsibilities overseeing credit, fixed income and currencies trading, while Fleury will continue to run the bank's most important trading franchises: equities and equity derivatives.
Oudea, one of the longest-serving megabank CEOs in Europe, said last month that he plans to rely less on trading following losses last year from complex derivatives that didn’t perform as expected when the pandemic upended markets. Oudea was a staunch defender of the trading business until recently. This isn't the first executive shakeup in recent months at the bank. Oudea has already reshuffled top management in response to the trading losses, including ousting deputy CEO Severin Cabannes and promoting Slawomir Krupa to run the investment bank.
"This new management structure of the market division, tighter and under my direct supervision, will allow us to strengthen day-to-day cooperation, alignment and agility within Global Markets," Krupa said in the statement.
Like Deutsche Bank, SocGen is being led to focus more on corporate banking and "transactional" banking. SocGen’s revenue from the global markets business has steadily declined in recent years, falling from €5.9 billion in 2017 ($7 billion) to €5.2 billion ($6.2 billion) in 2019. Trading losses booked during the first half of last year caused revenue to slump to €4.2 billion in the wake of the trading losses.
But DB might also have some important lessons for SocGen: Although Deutsche Bank’s CEO Christian Sewing has made transaction banking a key pillar of his four-year turnaround plan, DB remains dependent on fixed-income trading, forcing Sewing to adjust his original plan.
As for SocGen's new top traders, Cartier joined the bank originally as a trader in 1993 and took the helm of the fixed income business in 2019, just as the unit was undergoing a deep restructuring after a slump in sales.
Prior to that, he was head of global markets in the Americas and worked across Asia in a variety of roles, including as regional head of the fixed income business in Hong Kong and head of emerging markets trading in Singapore. Fleury spent a decade working for SocGen in the early 2000s, where he was based in Tokyo, New York and Paris. He rejoined the bank back in 2018 to lead its equities trading unit after working at Credit Suisse, Morgan Stanley and Bank of America Merrill Lynch.
SocGen suffered its first annual loss in more than three decades last year, prompting a cost-cutting drive that will eventually cull 640 positions from its investment bank.