Industrial Bank of China’s main business is in China, and its overseas business is relatively small. It is less affected by the financial crisis in Europe and the United States.
In 2008, Coles, president of Société Générale's global investment management and services department, said that the bank's private banking department was still operating well in the current credit crisis environment. A senior executive at Societe Generale claimed that the bank's personal banking unit continued its good business development in the second quarter despite the credit crisis.
Philippe Collas, President of Société Générale Group’s Global Investment Management and Services Department, claimed that the bank had a net capital inflow of 1 billion euros in May and that its business is progressing very well. Société Générale Group’s Global Investment Management and Services division includes the group’s private banking and asset management divisions.
Coles claimed that there were capital inflows from Asia to different regions in Europe, including emerging markets.
Coles added that Société Générale’s previous trading scandal, which cost the bank billions of euros, had little impact on the bank’s individual banking franchise. Coles said people have come to realize that this is just a thing of the past.
Industrial Bank sees opportunities to further expand its business through acquisitions. What the bank has done most recently is to acquire a small number of shares in Rockefeller's parent company, Rockefeller Financial Services (Rockefeller Financial Services).
Colles said this was an excellent deal.
Appointment of new CEO
Société Générale announced that the board of directors formally appointed Frederic Oudea as the new chief executive officer (CEO). Re-assumed the CEO position but retained the chairmanship. At the same time, many positions in the company's leadership were replaced by new people.
The new CEO Udaya is 44 years old, indicating that the "new generation" of Societe Generale is beginning to take control of management. In addition, the selection of the two deputy CEOs has also changed, and many senior executives of the financial investment department of the bank where the "huge fraud case" occurred have also been adjusted.
At the end of January this year, Industrial Bank announced that a trader's illegal operations caused losses of nearly 5 billion euros to the bank. Since then, Industrial Bank has become the focus of the global financial market, and its management has been under tremendous pressure. After the "huge fraud case" of Industrial Bank was exposed, Butong, who became CEO in 1997, offered to resign twice, but was rejected by the board of directors both times. On April 17, the board of directors decided to separate the functions of chairman and CEO, and nominated former deputy CEO Udaya as CEO, while Butong remained as chairman.
Internal controls will be strengthened
The 2007 annual report recently released by Société Générale showed that despite the dual impact of the subprime crisis and transaction fraud, the bank still made a profit of 947 million euros last year, with an average profit of 947 million euros per month. The profit per share was 1.98 euros.
The transaction fraud case exposed in January this year caused a loss of 4.911 billion euros to Societe Generale, which directly led to the first loss in Societe Generale’s investment banking business in many years, with losses as high as 2.221 billion yuan. However, as the three major businesses of retail banking, financial services, and investment management and services (including private banking) made profits of 2.061 billion euros, 600 million euros, and 652 million euros respectively, after deducting losses caused by transaction fraud and loss provisions for subprime mortgages, , Societe Generale still made a profit of 947 million euros in 2007.
The relevant person in charge of Societe Generale said that 2008 will be a transition period for corporate and investment banking business. The company will learn lessons from the recent outbreak of transaction fraud cases, strengthen internal controls, and adopt anti-fraud measures.
According to the findings of the special committee announced by Societe Generale yesterday, the bank will strengthen internal controls in three aspects in the future to prevent similar fraud risks from happening again.
The first is to strengthen the IT security system. Specific measures include stricter identity authentication and accelerating the implementation of the current security audit and system access management plan; the second is to strengthen process control to ensure that relevant information can be managed in different business units and at different levels. Fully share among personnel; third, strengthen the governance of the operational risk prevention system and ensure that fraud risks can be effectively prevented from the organizational structure.