Agenda Christophe_new photo

The French bank has had an office in London for 150 years and maintains big plans for the UK market in key areas such as energy transition and ESG, says Christophe Lattuada.

In the era of Brexit, much attention has been paid to whether banking activity is shifting from London to other European cities. But for Société Générale (SocGen), one of France’s oldest banks, 2021 has been a year where it is keen to draw attention to its continuing links with the UK. April 2021 marked 150 years since the bank opened its London office, its first location outside of France. And, as Christophe Lattuada, group country head for the UK and CEO of the bank’s London branch, makes clear, the bank remains committed to London as a major hub for activity.

“This is where investors and issuers, and the supply and demand for investment continue to meet — that hasn’t fundamentally changed. London remains an important location for the bank to reach many clients outside of our home domestic market,” he says, with many of the bank’s UK clients being large international corporates and financial institutions.

And while he doesn’t want to “minimise” the impact of Brexit, the key question for him has always been “what are the clients doing?”. He says: “We put people where the clients are, and so far we haven’t seen a big movement of clients. For us, the focus now is the next chapter, and how London will continue to evolve as a marketplace and financial centre.”

Symbol of commitment

A clear physical symbol of its commitment and growth ambitions is the bank’s new office in London’s Canary Wharf district, which is home to the majority of its London-based staff, including corporate and investment banking, payments and private banking teams. The office is state of the art in areas such as energy efficiency and its broader environmental footprint, as recognised by recent awards. Mr Lattuada remarks that having only signed a long lease on the building two years ago, “there’s no plan to leave any time soon”.

As part of its growth agenda, he adds that the bank’s broader commitment to the UK includes hiring new talent to support activity in its key priority areas. The organisation is also actively engaged in a range of diversity and inclusion and wellbeing initiatives, both internally within the bank and externally within UK communities.

Career history: Christophe Lattuada 

  • 2019 CEO of Société Générale’s London branch and group country head for the UK and Ireland
  • 2018 Head of Société Générale Prime Services
  • 2015 Co-head of Société Générale Prime Services
  • 2012 Head of strategy and corporate development for the global banking and investor solutions division, Société Générale

SocGen as a whole has identified energy, particularly energy transition, digital infrastructure and sustainable finance, as priority areas for it strategically, and these areas are right in the sweet spot for its UK financing and investment banking activity.

The bank is highly engaged in financing for large-scale renewable energy projects such as wind and solar farms, including large offshore projects, with an established multidisciplinary team comprising bankers, as well as colleagues, with a more technical background, such as engineering expertise.

London is also a focal point for SocGen’s technology, media and telecoms business, since it is active in financing the development of fibre and data centres, and other parts of the digital infrastructure.

Key ESG player

SocGen is also in a strong position regarding the broader environmental, social and governance (ESG) agenda, having been an early player in the development of sustainable finance solutions and a lead voice in debates on the role of finance in tackling climate change and other key ESG issues.

Mr Lattuada believes the bank’s experience in these areas stands it in good stead for the future. “It’s about having the right expertise, a good understanding of what the client needs are going to be and, crucially, a good understanding of what the risks are,” he says. “We have been pioneers, having built strong knowledge and expertise in these areas for nearly two decades. We haven’t financed just one wind farm, for instance — we have financed dozens in the UK and abroad, so we are well placed to advise on what will and won’t work.”

Banks are playing an increasingly central role in the transition to a more sustainable global economy and are under ever-greater scrutiny on whether their public commitments match the reality of how they are doing business. This is a responsibility that Mr Lattuada is keenly aware of, acknowledging that many SocGen clients, including several oil majors, are going to be at the forefront of such transition efforts in the coming years. 

He says the bank’s approach, and wider attitudes to ESG, have evolved. Not only has SocGen established firm policies that it is not afraid to publicise, he says — such as sectors it will no longer finance — but its clients are also taking on board sustainability issues. “When I first joined the bank a decade ago [and] we were beginning to develop those policies, it could be challenging to communicate them without spooking our clients,” he says. “Now it is completely the opposite, and we even get clients asking us about our policies to make sure they are robust enough.”

We don’t have a single client that doesn’t understand that they will need to make changes

Christophe Lattuada, SocGen

But he also acknowledges the balancing act can mean being a critical friend. “Our objective is to accompany our clients, and to help them to transform themselves. And I don’t think it’s an exaggeration to say that we don’t have a single client that doesn’t understand that they will need to make changes. There might be some divergence in views on exactly what is needed, but the direction of travel is accepted and clear,” he says.

However, “it does also mean that we sometimes have to say no to clients on certain projects, or to tell them if they don’t improve their energy mix, in a few years we may not be able to continue working with them,” he adds. “But in those situations what we also say is ‘let’s work together to figure out how you can make progress’.”

In reality, though, he says: “Frankly, the main priority for us is to meet the accelerating demand from investors, communities, consumers and clients, to make progress quickly enough.”

Equity derivatives challenges

Although its positive track record within ESG is clearly an asset, some of the bank’s other areas of historic strength have been causing challenges recently. SocGen, along with several other banks that are active in equity derivatives, saw its returns in this area take a significant hit in the first and second quarters of 2020 due to pandemic-induced disruption in the financial markets.

The bank has since taken action to adjust the risk profile of its equity derivatives and structured products business, reflected in recent positive first-quarter performance, and Mr Lattuada believes the refocused business will continue to be an important area, both for the bank and its clients.

“It’s an area of historic strength for the bank; we have been active in this area really ever since it first existed. But it’s true that since last summer what we’ve done is to make sure we are less sensitive to large and unexpected changes in market conditions,” he says. “But when you look across the portfolio of products as a whole, it was only a very limited set of products that were creating those exposures. What we have done is to focus instead on the products and strategies that will not create that sort of risk, even in very challenging market conditions.”

However, despite the changes he says: “[This] does not really affect our broader relationships or activity with clients in this area. These products help our clients, such as insurers and retail investors, to invest while also benefiting from some protection from risks that we know remain in the market, so being able to design products that help clients manage those risks is absolutely critical.”

Commitment to clients

SocGen’s recent strategy presentation for its global wholesale bank majored on client focus, and growth in financing and advisory activities. This is music to Mr Lattuada’s ears, and he says while these are not necessarily revolutionary concepts, they are at the heart of what clients need from modern banking.

Regarding his purview over UK clients, building up these good relationships is critical. But he is confident that over the years, SocGen has both invested the time and delivered when clients needed it to, in order to build up that trust. Much like the bank’s commitment to its presence in the UK, Mr Lattuada says that you have to demonstrate long-term commitment to your clients in order to expect growth in the future.

“For 150 years, we’ve been there for the good times, as well as the bad times,” he says, “and last year in the UK, we stood by our clients when they needed help to put in place finance and strategies to manage the crisis. Clients will remember, even 10 years from now, whether or not you were there for them at a moment like that. Banking first and foremost has to be a client-focused endeavour, and so getting that right is crucial for all the rest, and this is central to the way we work.”

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