‘The most British of foreign banks’

Société Générale has been in the City of London for more than 150 years which is the greatest compliment a French bank could pay the UK’s financial centre. In fact the bank’s first venture outside France after it was initially founded was in the UK. 

“We tend to think of ourselves as the most British of foreign banks,” says Thierry d’Argent, who heads the institution’s London branch and is chief country officer for SG in the UK and Ireland.

He took up these roles in May 2023 when Slawomir Krupa became CEO and introduced a number of important changes to streamline the institution. These included rearranging the investment bank to shrink its balance sheet so capital can be freed up for other product lines. This has been described by the bank as an “asset-light” model that should make SG nimbler and enable it to diversify income streams. 

Also central to this strategy is the joint venture in cash equities and research businesses launched with asset manager AllianceBernstein at the start of April 2024. In his remarks that accompanied the launch, Krupa said the tie-up illustrates SG’s desire “to develop innovative pathways” to benefit investor and issuer clients and increase “revenues sustainably”.

Mastering new fronts 

For d’Argent, who has been at SG since 2009, getting on top of his new responsibilities against a backdrop of such change has been intense.

“It has been a very busy but incredibly rich few months in which I had to absorb many things in terms of getting to know the regulations, clients and different teams in more depth. There is a breadth of businesses here that I was not completely aware of at first, to be honest.

“Discovering all these areas where we have these amazing talents like people who run some of our global market operations and other desks from [London] has been very exciting.”

It has also been reassuring for d’Argent to see so much quality work being done to help the bank move up the rankings. 

This means being a leading European bank on the wholesale side and maintaining the edge where it is strong: fixed income and equity markets. 

SG is also known for its financing of large-scale infrastructure projects in renewable technologies like interconnectors. And then there are plans to develop other franchises such as cash equities alongside research to prime brokerage services. 

D’Argent goes through the bank’s vision to integrate these old and new worlds. 

“We are trying to stay a step ahead on the climate front by transforming the entire bank and so across all our businesses we aim to be ‘ESG by design’, from financing to advising, to our global markets activities,” he says.

“I was struck at the end of last year when I asked a colleague about the percentage of deals they have advised on that are ESG transition-related. It was actually more than half, so it’s very meaningful and that is going to remain a very strong development area for us.”

On prime brokerage, d’Argent says that SG wants to be able to scale this business in a manner that is relevant for clients. 

He observes that when a bank starts to become globally relevant in certain markets it may not be the best owner of certain assets. That can be the case even if the bank is a large institution with a huge balance sheet. 

“The way to think here is to realise that the origination capacity of the bank exceeds its balance sheet potential to some extent,” he says. “So we aim to be asset-light so that we are in a position to be there for our clients when they need us and not constrained by the balance sheet.

“This asset-light strategy along with the recent launch of the equities joint venture with AllianceBernstein to form Bernstein will be another driver to grow sustainably in all these areas that I have talked about.”

London focus 

What links these is London as a hub that is essential for SG’s business ambitions in terms of retaining market share in traditional sectors and expanding in others. 

D’Argent says that the in-house view at SG is London will remain a very important global financial centre relevant to Europe due to the amount of capital managed there. Also, that money remains essential to help finance the European economy, including those investments that relate to the energy transition. 

It covers a spectrum where SG has pedigree, from retrofitting real estate to power generation and energy storage. 

D’Argent adds: “It is not only the capital that is in London but the expertise and knowledge as well. From our perspective, there is a huge amount of talent here, whether you look at FX or global banking type businesses with advisory and financing abilities.  

“I believe our perspective is shared by the majority of financial institutions so these crucial skills will be deployed globally from the City.”

Economic fundamentals

All of these grand projects require strong pillars aligned with the group’s commercial priorities.

“Bankers play a very specific role in society and have a lot of responsibility. So as an institution you have to be rock-solid and be ready for whatever the weather throws at you,” d’Argent says.  

“It can be rough, it can be quiet, you can have headwinds and fair winds but the headline message is: you have got to remain available to serve your clients and play your part. 

“Covid-19 was one moment where banks demonstrably did that and SG played a major role to support its clients, including here in the UK.”

Being there for clients and financing what society needs are the central appeal of banking for d’Argent. 

“I started as a management consultant and I wish I knew from the start I wanted to be a banker because it’s a great job,” he says. 

D’Argent worked as an M&A banker and then moved to corporate and eventually global banking. From his experience there are two lessons young people who want to become bankers or join financial services should consider. These are the material differences bankers can make to the climate transition, and always putting clients first.

“There’s very little in this world that doesn’t go through banks at some point and it’s going to be very demanding, because at the age of 30 or even younger you’re going to be talking with CEOs of multinational companies,” he says.

“So it is going to take an enormous amount of work but in terms of having an impact the upsides are huge. 

“I am a firm believer that if you want to help address climate change one of the most constructive things to do is to go into investment banking because that’s where capital is going to get allocated from; either directly or as a catalyst to finance the trillions in investments that are required. 

“And also that’s where you’re going to be at the forefront of enabling the technological changes that are going to be required.”

While many young people may not realise this, d’Argent says they quickly understand the power of investment banking once they start work there. 

“If you look at the size of the project and its impact, they are measurable, whether green energy production or carbon reduction, whichever way you look at it,” he says. 

“Of course, there are other areas you can go into such as research in university or certain industries, yet here you can make a material difference too.”

D’Argent cites SG projects like its Greenlink Interconnector to join the power markets of Ireland with the UK, Net Zero Teesside Power and Dogger Bank Wind Farm as evidence of what an investment bank can do.  

Aside from its core activities, SG also does its fair share of work on corporate social responsibility. 

“On average nearly half of all staff are involved personally with CSR activities, not just donating but the amount of time they spend volunteering and coaching, is very meaningful. 

“And it’s important because it’s very consistent with what we do on sustainability as people support it and they like it here.” 

How does d’Argent see the year ahead? “We have a very strong foundation based on past performance, whether that’s profitability, risk management or governance,” he says. “We are positioning the business for sustainable growth aligned with the group’s priorities.”