SG looking for partners to expand financial services

French banking giant Societe Generale (SG) is looking for local partners to help develop a full range of financial services in China, one of its top executives said.

"We are interested in doing banking, insurance and securities business in the country and are open to expanding through local partnerships," Jackson Cheung, chief executive officer of SG China, told China Business Weekly.

France's second-largest lender, which opened its wholly-owned unit in China last year, has extended its business portfolio in the country from corporate and investment banking to include retail and private banking.

Cheung said the bank was looking for opportunities to cooperate or even buy into a Chinese bank with a broader national retail network, as it needs more local retail outlets for its products.

In 2007, SG failed to buy into Guangdong Development Bank after a protracted battle of nearly two years with Citigroup. The bank is now 20 percent owned by Citigroup.

At the one-year anniversary of the founding of the SG China unit, Pierre Bonzom, head of commercial and personal banking, said the bank obtained a general permit from the China Banking Regulatory Commission in August to offer renminbi retail service in the country.

The bank will begin to offer yuan retail services as soon as its outlets receive yuan retail licenses from local banking regulators, he said.

"With the yuan retail license, we can provide a more diversified private banking service in China," said Hsiao-Yun Lee, head of private banking for SG China .

With a new branch opened in Tianjin in early September, SG has increased its footprint in China to five cities through its seven outlets in Beijing, Shanghai, Guangzhou, Wuhan and Tianjin. "Besides concentrating on opening outlets in cities where we currently have operations, the bank also plans to tap into the western region in the next few years," Cheung said.

In addition to banking services, SG China is seeking opportunities to expand its insurance and securities business in the country.

"We see the insurance sector as a promising business in China and are open to cooperate with local insurers," Cheung said.

SG China opened an insurance business representative office in Beijing two years ago.

Pascal Sefrin, head of corporate and investment banking for SG China, said the bank was working with two financial institutions on developing new structured products. Sefrin declined to name the institutions.

In March, SG China partnered with Everbright Securities to cooperate on derivatives design and risk management.

As one of the leading players in the global derivatives market, SG is becoming more conservative in developing new products since the outbreak of the global financial downturn.

"In the Chinese market, we will first bring forward more conventional products catering to clients' lower appetite for risk, and as the second step we will add more innovative solutions to our products," Sefrin said.

(China Daily 10/12/2009 page4)