French duo Crédit Agricole and BNP Paribas are believed to be the most likely bidders, after two major European rivals ruled themselves out in February.
Crédit Agricole’s main interest would be in SocGen’s investment banking arm, which would strengthen its own investment bank, Calyon. Should this happen, SocGen’s 7.5% market share in retail banking might be an easy target for rival BNP Paribas, whose investment banking operations overlap with those of SocGen. It is rumoured that the two banks might consider a join break-up bid.
Italy’s Intesa Sanpaolo has also been mentioned as a possible buyer and some pointed out that, although the French government announced that foreign bids were unwelcome, a deal still might have been struck, as France’s national air carrier, Air France, is currently bidding for Italy’s state-controlled Alitalia. However, Intesa’s investment banking chief Gaetano Micciche denied any interest in an investment or takeover of SocGen. Germany’s Deutche Bank has ruled itself out too.
Uncertainly about a possible bid from HSBC has been raised as well. At the beginning of February, Merrill Lynch’s analysts singled out the UK bank as a good fit. A week later, however, HSBC announced that it might consider disposing of its French retail banking operations – which it took over with the £6bn ($11.7bn) acquisition of Crédit Commercial de France in April 2000 – as part of an ongoing review of operations that will look at selling underperforming parts of its business. If carried out, the move would underline HSBC’s lack of interest in SocGen.
In Spain, there is speculation about BBVA teaming up with BNP Paribas for a takeover bid, and analysts point out that a bid for SocGen’s retail banking arm would prove tempting for Grupo Santander.
Société Générale has begun a heavily discounted €5.5bn capital increase aimed at restoring its credit-worthiness and fending off bidders. The French bank has also pulled out of a shortlist of banks interested in buying a stake in Libya’s Wahda Bank, as reported by Reuters. The shortlist comprised Arab Bank, Arab Banking Corporation, Attijariwafa Bank and Intesa Sanpaolo.
It is business a usual, however, for Société Générale Securities Services (SGSS), which has agreed to acquire the former Capitalia’s clearing, custody, depositary bank and fund administration businesses from UniCredit, which acquired Capitalia last year. The securities services business bought by SGSS represents assets under custody of €102bn and assets under administration in Italy and in Luxembourg of €22bn and €5bn, respectively.
Olivant leaves bid
Private equity group Olivant Advisors has withdrawn from its bid to take over troubled UK lender Northern Rock. The remaining contestants are Virgin Group and an in-house team lead by Northern Rock’s non-executive director Paul Thompson.
French bank BNP Paribas and its joint-venture partner Turk Ekonomi Bankasi have launched a securities services business line in the Turkish market. TEB Security Services will offer clearing and settlement of Turkish securities, safekeeping, asset servicing and tax services, as well as associated Turkish Lira cash and liquidity management services to non-resident financial institutions.
A group of banks is set to launch a new derivatives trading platforms in Europe, called Project Rainbow. Deutsche Bank, Barclays, Goldman Sachs, JPMorgan and UBS are reportedly part of the group backing the project, which is close to selecting a technology provider, according to the Financial Times. A similar project has been launched in the US, named Four Seasons, backed by Deutsche Bank, Credit Suisse, Citadel, other technology providers and 12 asset managers, according to Financial News. Both projects aim to increase the pressure on exchanges, such as NYSE Euronext and the CME Group, to lower fees by funding alternative trading platforms.
European Finance House (EFH), a unit of Qatar Islamic Bank, has been awarded a UK licence. EFH aims to capitalise on growing demand for Islamic finance among the EU’s 14 million Muslims.
China’s banking regulator has approved Industrial and Commercial Bank of China’s (ICBC) acquisition of a 20% stake in South Africa’s Standard Bank Group, the official Xinhua news agency reported. ICBC, China’s largest bank, agreed in October to pay HK$42.31bn ($5.42bn) for the stake.
Italy’s Intesa Sanpaolo has agreed to pay €504m for a 100% stake in Ukraine’s Pravex Bank, giving the Italian lender a foothold in a fast-growing market. Last year, Intesa unsuccessfully tried to buy another Ukrainian bank, Ukrsotsbank, which earlier this year was bought by Intesa’s domestic rival, UniCredit.
Iran has announced that it is set to launch its first investment banks, Amin, Novin and Pasargad, as part of its efforts to speed up privatisation and get round US restrictions on its banking sector. The US has put pressure on European banks to cut business with Iran. The three banks will be run by consortia that include privately owned investment companies, some of which are affiliated to private banks.
Correction
Credit Suisse’s private banking headcount is set to grow 30% to 4000 employees in the next three years, not two years as mentioned in the People section in our February issue.
