Newsmaker: Krupa, hard-driving veteran entrusted with reviving Societe Generale

Alliancebernstein Holding LP

23/05/2023 07:00

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    By Mathieu Rosemain
       PARIS, May 23 (Reuters) - Slawomir Krupa has one clear
mission when he takes over at Societe Generale  SOGN.PA  on
Tuesday: remake France's third-largest lender as a top-tier bank
with a distinct identity. 
    The 48-year-old, who has spent his whole career at SocGen,
must perform a tricky balancing act, improving returns for
shareholders without taking undue risk against a shaky backdrop
for bank stocks. 
    "It's very important to clarify (things), where necessary,
to all stakeholders and say: That's what Societe Generale is,"
Krupa, who most recently headed SocGen's investment bank, told
Reuters in an interview. He is due to lay out his plans for the
bank by the autumn. 
    After a tumultuous 15 years under his predecessor, Frederic
Oudea, who merged units, sold businesses - including a costly
Russia exit - and cut risk-taking, the bank's stock price is
trading at just 30% of the book value of its business. 
    As a yardstick of investor support, that puts it on a par
with Deutsche Bank but far behind its bigger French rival BNP
Paribas and at the bottom end of European lenders. 
    Societe Generale's vulnerability was made clear earlier this
year when its stock was among the hardest hit as investors
sought safety following the collapses of Silicon Valley Bank and
Credit Suisse. Those who appointed Krupa hope he can lead the
bank out of this danger zone.
    A person familiar with the decision by SocGen's board to
appoint him as CEO said the top priority is to improve
efficiency within the bank's current structure, as Krupa did
after taking over the investment bank in early 2021.
    This could include seeking to squeeze more out of other
parts of the business to reduce what is seen as too high an
exposure to riskier investment banking. 
    In his previous role Krupa cut costs and addressed trading
risks, said that person, who is familiar with the SocGen's board
thinking, paving the way for a turnaround of the division.
    Two years on, SocGen's investment bank recorded the largest
annual growth in pre-tax profit among the three French listed
banks, cementing it as the group's main profit driver.  
    
    BREAK WITH TRADITION
    Krupa's reputation as a problem-solver helped make his case
for the top job when he appeared before SocGen's independent
directors in September, people familiar with the process said. 
    Despite his 26 years at the bank, he was also viewed as
something of an outsider, because unlike SocGen CEOs stretching
back a century he has not previously been in the senior ranks of
France's public administration.
    The board favoured a break with tradition, said one of the
people. Born in Communist Bulgaria in 1974, Krupa's family
emigrated from Poland to France when he was six.    
    His hard-driving style is also seen as a contrast to
Oudea's.
    "Slawomir has ... a way of moving forward, of taking people
with him. Frederic (Oudea) is more collegial," said Jean-Pierre
Mustier, the former UniCredit CEO and former head of SocGen's
investment bank who made Krupa his chief of staff in 2007.
    A self-described straight-talker, Krupa can be impatient and
demanding, a former top executive at SocGen said.
    Others say that bluntness is a strength. One of SocGen's top
corporate clients, who has met Krupa on several occasions, told
Reuters he was not part of a French establishment where nobody
wants to say no. 
    Krupa faces challenges from the outset. Some investment
bankers suggest that ultimately the group could be combined with
a European rival.
    One, asking not to be named, said such a move would benefit
SocGen because it was a "mid-size player" dwarfed by U.S. rivals
and domestic giant BNP Paribas.
    That view is echoed by Jean Dermine, a professor at business
school INSEAD. "How to improve profitability without mergers? I
don't see how it is possible at all," he said.
    For now, Krupa is focused on operational questions, such as
finalising a joint venture with investment management company
AllianceBernstein  AB.N  for global cash equities and equity
research. That may offer a platform to grow in the United
States.
    But Krupa said a big merger is not on the cards in the near
term. 
    "Strategically, does Europe need stronger banks? The answer
is yes, but I don't think that's really on the agenda at this
stage," he told Reuters. 

 (Reporting by Mathieu Rosemain; Editing by Elisa Martinuzzi and
Catherine Evans)
 ((mailto:Mathieu.Rosemain@thomsonreuters.com; +33 1 8098 1239;
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