WM Market Reports
Societe General Says Still Well Placed To Tap Asia's Ascent After Private Bank Unit Sale

The banking group sold its Asian private bank last year but remains well placed through its agreement with DBS, and through its network, to exploit rapid growth in Asian wealth, a senior executive said.
Societe
Generale is well placed to continue tapping into Asian
entrepreneurs’ wealth and business needs through partnerships it
has in the fast-growing region, the French bank said when asked
about the consequences of selling its Asian private bank last
year.
The Paris-listed lender’s private bank, in conjunction with
Forbes, has launched a report exploring the views of
more than 200 entrepreneurs around the world. The report, called
Creating Wealth, A Survey of Entrepreneurs Worldwide: Their
Insights. Their Challenges. Their Needs, found that 73 per
cent of Asian respondents are upbeat about economic prospects in
their country, with 51 per cent saying China is the place where
the most money will be made. The report shows contrasts between
how entrepreneurs view their regions and how they are seen by
those from other parts of the world.
Given the continued buoyancy of Asia and the confidence of
business people in that region, how does the bank feel about last
March’s agreement to sell its Asian private banking arm, if this
is a region where there is likely to be continued rapid growth in
high net worth individuals?
That was the question this publication put to Jean-François
Mazaud, head of Societe Generale Private Banking, at a
presentation of the report at the firm’s London offices
yesterday.
When the group sold the private bank in Asia to DBS Group, a part
of the agreement was that Societe Generale’s clients will
have access to DBS’s private banking offering in Asia, while DBS
clients get access to Societe Generale’s offerings in Europe as
well as its corporate and investment banking solutions, Mazaud
said.
“It is not that we don’t operate in Hong Kong and Singapore or
that we don’t have Asian clients,” he continued. “We decided to
sell but we also agreed to share platforms [with DBS],” he said.
“We operate on a B2B [business-to-business] basis and that for us
is a more efficient way of making the business,” he said.
An issue was that Societe Generale’s private bank in Asia, with
the assets under management it was overseeing, did not have the
critical mass to be a fully successful business – if those assets
had doubled then this would have been different, he added.
At the time of the agreement, DBS Group bought a business with
$12.6 billion of assets (as at the end of 2013), buying the firm
for $220 million in cash, with an adjustment based on the net
asset value and the assets under management at the completion of
the deal. The firms also entered into a memorandum of
understanding to develop a commercial partnership to benefit
their respective sets of clients.
Regional differences
Among other points, the report found that when entrepreneurs were
asked about their views on the state of the economy in their
countries, 53 per cent of respondents said it was “very
good”, 29 per cent said “neutral” and 18 per cent
said “poor”.
In Asia-Pacific, some 73 per cent said “very good”, 18 per cent said “neutral” and only 9 per cent said “poor”. In Europe, by contrast, only 30 per cent said prospects were “good”, 34 per cent said “neutral” and 36 per cent said “poor”.
In North America, 63 per cent of respondents said the state of
the economy was “very good”, 28 per cent said “neutral” and
9 per cent said “poor”. In the Middle East and North Africa,
57 per cent said the state of the economy in their countries
was “very good”, 36 per cent said “neutral” and 7 per cent
said “poor”.
There are big differences between how business people saw their
own countries and how they were perceived from outside,
suggesting the media and other forces can colour perceptions to a
degree, the survey showed. For example, 35 per cent of North
American respondents said the state of the world economy was
“very good” and 63 per cent of respondents from this region said
the state of their region’s economy was “very good”.
Separately, when asked if their countries enjoyed a competitive
advantage, 66 per cent of Asian respondents said yes, 76 per cent
of North Americans said yes, but only 18 per cent of those from
the Middle East and Africa said yes. Some 35 per cent of European
respondents said their countries had a competitive advantage.