The Economic Times,
New Delhi, Chennai, Bangalore, November 21, 2006

French banking group Société Générale (Soc-Gen) is looking for fresh Indian partners to build on its consumer credit portfolio in India. The group, which has already acquired 75% in Apeejay Finance, expects the sector to expand rapidly.

Bank CFO, Frederic Oudea, told ET that this was one of the fastest ways to expand the footprint of the universal bank in India. Post-acquisition, Société Générale expects to drive the management of the new entity, which manages over Rs. 500 crore in outstanding loans. He said to service the fast-expanding middle class in India, forays into consumer finance was essential, to establish its presence, as it would take time to obtain branch licenses here.

Société Générale is the latest in the series of foreign banks which are seeking to establish a strong presence in India. But Mr. Oudea did not accept that they had made a late foray, compared to some of the US based banks. Incidentally the bank was one of the financial advisors for LN Mittal in his buy out of Arcelor. The CFO said the group has plans to set up at least 50 branches in India in the next three years, and also try for mergers and acquisitions to expand its retail banking footprint. He acknowledged that the RBI restriction on giving branch licenses to foreign banks, and on M&A in the financial sector, were constraints. “For us being small does not make sense as we aim to deliver a strong financial services to our clientele”, he added.

The Times of India,
Hyderabad, November 21, 2006

SOCGEN buys 75% in Apeejay Finance

French banking major, Société Générale (SOCGEN), which has assets of $411 billion under management and assets of $2,155 billion under custody, plans to foray into the Indian banking sector. To start with, the fifth largest bank of Eurozone, has acquired 75% stake in Apeejay Finance of Apeejay Surendra Group.

CFO of SOCGEN Frederic Oudea, who is on a visit to India to have first hand experiences of Indian regulations and business environment, told TOI that the bank was keen to start its branch network in the country as takeover of local banks are not allowed at the moment. Oudea said that the bank has a strong presence in corporate and investment banking segment in India. But, now it wants to enter in the retail banking also.

The Times of India,
New Delhi, November 21, 2006

SOCGEN eyes banking foray

French banking major, Société Générale (SOCGEN), which has assets of $411 billion under management, plans to foray into Indian banking sector. To start with, the fifth largest bank of the Euro-zone, has acquired 75% stake in Apeejay Finance of Apeejay Surendra Group.

SOCGEN CFO Frederic Oudea, who is on a visit to India told TOI that the bank is keen to launch its branch network as takeover of local banks are not allowed. Oudea said the bank has a strong presence in corporate and investment banking segment in India. But, now it wants to enter retail banking also.

The acquisition of Apeejay Finance, would help the bank in setting up its consumer finance network. Oudea refused to divulge the money that it paid to acquire the company as acquisition process is not complete. Apeejay Finance has 18 branches, 153 employees and 40,000 customers.

He further said as India is a large country, an investment in banking sector would make sense only if the bank would be allowed to ramp up its branch network to 150. He is meeting FM P.Chidambaram and other senior government and RBI officials.

Oudea said to ramp up its operation fast, the bank would like to take over a local bank here. For this, he plans to pick up a minority stake in a bank and increase it later. He said SOCGEN would enter with a long-term view of 25 years.

On the issue of starting with his own branch network, he said that as India is a large country, a network of 20 branches would give it no visibility. So to justify its investment, the bank would like to take its network to around 150 branches. He said in Egypt and Russia also, the bank had started its operation with its own branch network, which gave SOCGEN not only the foothold in the country but also helped it understand the market. Later, when some local banks were up for sale, the bank did bid for them.

He said the bank would follow similar strategy in India also. It has its presence in mutual fund segment through SBI. In SBI asset management company, SOCGEN has 37% stake. It has a private banking division in the country, which employs 45 bankers based in New Delhi and Mumbai. The bank has also a fleet management and vehicle rental business in India. The company has 31 staff with branches in Mumbai, New Delhi, Bangalore and Hyderabad.

Hindustan Times,
Mumbai, November 24, 2006

Mittal's advisor seeks more Indian clients

Société Générale (SocGen), the Paris-based financial services giant, that advised Mittal Steel in its bid for Arcelor, is keen to work with other Indian companies eyeing global takeovers.

SocGen is also looking at doubling its Indian manpower over the next two years to 2,000.

Deputy Chief Executive Officer of Société Générale, Patrick Soulard, who looks after corporate and investment banking, said: "We were advisors to Mittal Steel for the Arcelor deal. This deal has created a mood for takeovers in India."

Twelve members of the SocGen are currently in India assessing the market. It has already announced the plan to enter retail banking in India. SocGen has already acquired a 75 per cent stake in Apeejay Finance, which will be its consumer credit arm in India.

Soulard said: "Indian companies have started to think big after the Mittal takeover. We have received encouraging responses front clients that we have interacted with over the last few days." He added that the Eastern Europe would be a major area for takeover and acquisitions by Indian companies. "We already have big presence in Eastern Europe, We had moved into these markets with the help of acquisitions in 1999-2000 onwards and now have a strong presence in these," he said. "This is a global business and our global presence is important. We have a strong investment banking presence in Singapore and Hong Kong," he added.

Hindustan Times,
Mumbai, November 25, 2006

SocGen wants to advise takeover tycoons in India

Société Générale (SocGen), the Paris-based financial services giant, which advised Mittal Steel in its bid for Arcelor, is keen to work with Indian companies eyeing global takeovers.

"Indian companies have started to think big after the Mittal takeover. We have received an encouraging response from the clients that we have interacted with over the last few days," the deputy chief executive officer of Société Générale, Patrick Soulard, who looks after corporate and investment banking, told Hindustan Times.

Twelve executives from SocGen are currently in India assessing the market. The company has already announced a plan to enter retail banking in the country and has already acquired a 75 per cent stake in Apeejay Finance, which will function as SocGen's consumer credit arm in India.

Soulard said the eastern part of Europe will be a major area for takeover and acquisitions by Indian companies. "We already have a big presence in Eastern Europe. We had moved into these markets with the help of acquisitions from 1999-2000 onwards, and now we have a strong presence in these markets," he said.

Though SocGen is looking at doubling its Indian staff over the next two years to 2,000, investment banking services for Indian companies looking for mergers and acquisitions are likely to be led from overseas.

"This is a global business and our global presence is important. We have a strong investment banking presence in Singapore and Hong Kong," Soulard said.

Asked whether the company would rename Apeejay Finance in India, Soulard said, "One thing I can say is that it will not be renamed Société Générale. Whether we re-brand it depends on the people who run the business. Consumer retail credit is a very local business, so there is no immediate need to use the Société Générale brand".

The Hindustan Times,
Mumbai, November 27, 2006

Keen to finance LNG shipping

Société Générale is eyeing the Indian market in a big way. It is launching its investment banking as well as retail banking operations in India. The French financial giant has already acquired a 75 per cent stake in Apeejay finance for a retail foray. It also has a joint venture with State Bank of India for asset management. The top management of the company, all 12 members, was in India last week. Patrick Soulard, the deputy chief executive officer (corporate and investment banking) spoke to Suman Layak in an interview.

What would be your focus areas in India?
In corporate finance and investment banking we are looking at structured finance, export finance, financing for the energy sector: commodity hedging and derivatives for companies. In energy, we are eager to finance shipping of LNG to India by the various energy companies as well as offer interest rate derivatives to financial institutions.
The one area that is developing faster than the others is shipping finance—specifically LNG financing. In fact, we want to look at the entire energy chain, we are also looking at financing projects related to the oil and gas sector. At the same time, we want to offer oil and gas companies commodities hedging options for protecting themselves against international prices.

You have spoken about entering retail banking in India. How do you plan to to go about it?
We have already entered retail finance through our takeover of Apeejay Finance. However, right now we are not in a position to say how we will enter retail finance. We are not at the stage where we have a definite idea on whether we want to take a stake in this or that bank, or start a retail network of branches.
In Russia, we did start off with our own branch network, and then also bid for banks that were being privatised. However, we are not about to make a move in India in retail banking in the immediate future.

What are your plans with Apeejay Finance?
A lot will depend on the management of the company. The company will continue to be headed out of Kolkata. We went over to Kolkata and met the finance minister of the state. He was very happy to know that we will continue to be head quartered out of Kolkata. We are already present in 18 cities through this company and it allows us an almost India-wide presence.

You have advised Mittal Steel and you are looking at advising other Indian companies far their takeover moves. How do you view the steel industry of China?
The issue here is that the industry in China itself is game for some domestic consolidation. Once that option is available, companies normally do not want to look abroad. However, the Chinese oil and gas industry is more game for overseas acquisitions and are always on the lookout.

The Economic Times,
Kolkata, November 30, 2006

SocGen plans to increase stake in Apeejay Finance

French banking major, Société Générale (SocGen) is looking at increasing its stake in Kolkata-based non-banking finance company (NBFC), Apeejay Finance, subject to regulatory approval. It plans to use this entity to expand its consumer finance operations, by extending loans for purchase of automobiles and consumer durables.

SocGen specialised financial services global head Jean-Francois Gautier told ET: “The acquisition of a stake in Apeejay Finance was a viable proposition because of its strong network, localised approach and the existing work culture. We will certainly look at raising our stake in the company, but will proceed in a cautious manner and go ahead only if it is found feasible with our plans for India.” The bank will particularly focus on extending consumer loans in smaller cities and newer towns through an agency-based approach, he added.

In June 2006, SocGen acquired a 75% stake in Apeejay Finance, in partnership with the Burmans. Of this SocGen owns a 45% stake. At present, Apeejay Surrendra group retains a 25% ownership stake in the NBFC. Car loans comprises 55% of Apeejay’s portfolio, of which used cars form a major proportion. The portfolio also consists of motorcycle loans, loans for purchase of TV sets and other electronic items.

SocGen plans to continue with the same product profile, while increasing the branches in smaller towns and cities. It is, however, not considering offering home loans through this vehicle.

Many of the foreign banks, like SocGen, are looking at the NBFC model to ramp up their presence in India, as there are currently no branch restrictions in this model as against the branch banking model.

The Economic Times,
New Delhi, Mumbai & Bangalore, November 30, 2006

Capital shot: Finance cos put expansion on fast track
SocGen may hike Apeejay stake, looks at auto, durables financing

French banking major Société Générale (SocGen) is looking at increasing its stake in Kolkata-based non-banking finance company (NBFC) Apeejay Finance, subject to regulatory approval. It plans to use this entity to expand its consumer finance operations by extending loans to buy automobiles and consumer durables.

Speaking to ET, the bank’s global head of specialised financial services, Jean-Francois Gautier, said, “The acquisition of a stake in Apeejay Finance is a viable proposition because of its strong network, localised approach and the existing work culture. We would certainly look at raising its stake in the company, but would proceed in a cautious manner and go ahead only if it is found feasible with our plans for India.” The bank would particularly focus on extending consumer loans in smaller cities and newer towns though an agency-based approach, he added.

In June 2006, SocGen acquired a 75% stake in Apeejay Finance, in partnership with the Burmans. Of this, SocGen owns a 45% stake. Currently, the Apeejay Surrendra group retains a 25% ownership stake in the NBFC. Currently, 55% of the portfolio of Apeejay comprises of car loans, of which used cars portfolio forms a major proportion. The portfolio also consists of motorcycle loans, loans for purchase of TV sets and other electronic items. SocGen plans to continue with the same product profile, while increasing the branch network to smaller towns and cities. It is, however, not considering offering home loans through this vehicle.

Many of these foreign banks like SocGen are looking at the NBFC model to ramp up their presence in India as there are currently no branch restrictions in this model as against the branch banking model.

The bank had recently sent a delegation of Apeejay employees to France and Poland in order to give them an idea of how Société Générale’s consumer loan companies function elsewhere. The visit was co-ordinated to facilitate exchange of ideas and product learnings.

Senior officials of the bank made a recent visit to India and China and held talks with car manufacturers, dealers and vehicle brokers to ramp up its automotive leasing business. SocGen may explore the option of entering into a commercial joint venture agreement with either of these entities, said Mr Gautier. As of now, there are around 2,000 vehicles which have been leased out to local corporates in the past one year.

In December 2005, SocGen set up its onshore wealth management business in India. The group’s asset management subsidiary, SG Asset Management, had announced the acquisition of a 37% equity stake in SBI Funds Management, the asset management subsidiary of State Bank of India.