SocGen to Expand Corporate Banking After Trading Losses

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Societe Generale SA plans to rely less on trading as Chief Executive Officer Frederic Oudea attempts to turn the firm’s investment bank around following steep trading losses on complex derivatives last year.

The Paris-based lender on Monday said the business will focus more on corporate banking, allocating more capital to financing, advisory and transaction banking. The firm expects revenue growth from those areas to help lift returns at the investment bank above 10% by 2023.

Oudea, a staunch defender of the markets business, is joining peers in emphasizing corporate banking to reduce earnings volatility, though his plan stops short of more radical measures such as Deutsche Bank AG’s exit from stock trading. SocGen’s equities business, which plunged the bank into its first annual loss in more than three decades, rebounded last quarter with its best performance since 2015, easing pressure on Oudea to implement a more far-reaching overhaul.

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“Our roadmap is simple, and so is our goal: delivering sustained profitability, with a lower standard deviation of our performance,” said Slawomir Krupa, who heads the investment bank.

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