If you believe the blurb accompanying SocGen's third quarter results today, you might think all's fine in the French bank's all-important equities business. "The Group saw an increase in its market share in cash equity activity and listed products," says SocGen victoriously of its equities trading results. That might, possibly, be the case for the first nine months of the year, but in the last quarter, SocGen's equities business seriously lost its mojo.
Revenues in the equities sales and trading business declined 6% in third quarter of 2015 compared to the third quarter of 2014. As the chart below shows, that puts SocGen towards the bottom of the performance league table for equities in the past quarter. Only Deutsche Bank's equities business did worse.
Things improve a little if you add prime brokerage revenues into the mix (as at BNP Paribas), but they don't improve much. SocGen's equities business is still scraping along at the bottom.
Worse, SocGen seems to have pulled out all the stops in terms of risk to achieve this mediocre result. Witness the chart below from today's investor presentation: equities trading value at risk (VaR). - VaR doubled in the third quarter compared to the previous year.
Trading risk at SocGen:
SocGen's fixed income sales and trading business did somewhat better, comparatively, in the third quarter. Overall, however, the implication is clear: if you want to work in sales or trading for a French bank, BNP Paribas looks best in terms of performance in the past three months.
Photo credit: Benjamin Mourot