Julien Ponthus and John O’Donnell

FRANKFURT/LONDON – Societe Generale’s CEO Frederic Oudea (OTC) will retire next year after leading the French bank through a rogue transaction scandal and the Euro zone crisis. It is the culmination of a 15-year turbulent tenure at the top.

Oudea is the most senior chief executive at a European bank. He took the helm during the 2008 financial crisis, when the bank had to deal with the multiple-billion euro fallout from the rogue trading scandal.

Oudea, a Polytechnique engineer school student in France and of France’s National Administration School, was a graduate of which included French presidents Jacques Chirac (and Emmanuel Macron). Oudea’s career began as a civil servant and he went on to become one of the best-respected bankers of France.

While the bank is dealing with the consequences of a pandemic, and the uncertainty that comes from war in Ukraine’s economic future, he plans to depart.

Jerome Legras from Axiom Alternative Investments said that it’s been “a bumpy ride” and some investors are frustrated with the small progress made by the bank.

Societe Generale’s share price, like many European peers after the 2008 credit crisis, never recovered and is now at 24 euros (£25.24), less than half its level before Oudea took over as CEO.

ROGUE TRADER SCANDAL 2008

Oudea became Societe Generale’s finance chief in 2003 but long played a secondary role to Jean-Pierre Mustier, then head of Socgen’s investment bank and considered the likely future CEO.

In 2008, a scandal involving a loss of 4.9 billion euros triggered by Jerome Kerviel led to Oudea becoming chief executive.

CRISIS 2009-2012 EUROZONE

France’s banks were particularly affected by the crisis in the euro area debt because they were exposed to Greek debt and debt in other eurozone countries. It was speculated that the French government might be forced to nationalize creditors.

As Greece was struggling to pay its debts back, panic swept Europe about the future of Europe’s banks.

France and its creditors were considered to be in danger. Oudea was put to the test by a flurry media reports and speculations, which included that Societe Generale faced collapse.

When Mario Draghi was president of the European Central Bank at that point, the pressure on the sector eased and he promised to do “whatever is necessary” to support the euro, the pressure abated.

SALE 2015

Oudea’s credit includes stabilizing the bank’s capital base and its weaknesses after 2008 crises, as well as selling businesses to reduce its Eastern Europe division.

Oudea was able to make a large profit by selling the stake of the bank in Amundi as part of a multi-billion euro stock-market listing in 2015. Lyxor, an exchange traded funds specialist, was sold by Oudea to Amundi.

Boursorama became the most popular online French bank after he merged with Credit du Nord.

Oudea’s arguably boldest move was at the start of this year when Societe Generale’s car leasing division ALD, which he floated in 2017, signed a 4.9 billion euros deal to buy Dutch rival LeasePlan.

Oudea was not overwhelming all of them. Legras said that “investors believed there wasn’t a clear strategy goal.”

Bank continued to be overshadowed by the risks of trading. It suffered a surprising loss in the first quarter of 2020 due to a sudden revenue drop at its equity trading unit following market volatility caused this year by pandemic.

Since then, the bank has restructured this division.

LIBYA BRIBERY 2018

Oudea has formally apologised for this episode and paid penalties of $1.3Billion for wrongdoing.

According to the U.S. Justice Department, Socgen received more than $90million in bribes from a Libyan broker between 2004 and 2009. This was used to secure fourteen investments made by Libyan-owned financial institutions.

2022 RUSSIA DESPERATION

Socgen was the first Western bank to declare its withdrawal from Russia last month. This came amid a fraught standoff between Russia’s and the European Union which had been increasing sanctions following Moscow’s attack on Ukraine on February 24.

Socgen said it will sell Rosbank to Interros Capital. Interros Capital is a Russian-linked company that has written off approximately 3.1 million euros.

Socgen was among a few European banks which had significant Russian presence. The sale of Socgen was seen by investors as a coup despite the high price because it cut out its relationship with Russia.

($1 = 0.9508 euros)