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Thursday, Nov 28, 2002

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SG to shut Asian arm

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MUMBAI, Nov. 27

SG, the corporate and investment banking arm of Société Générale, today announced that it is closing its Asian equity sales and research activities on account of depressed markets. The move will result in around 180 employees, representing nine per cent of the group's total workforce, being laid off in the region.

According to an official statement issued by SG, the conclusion was reached that, in light of the current market conditions, the development of this activity in line with the firm's own targets of sustainable profitability was not achievable. "These changes will affect approximately 180 employees in the region, which represent about nine per cent of the group's total employees in Asia-Pacific," SG said in a statement.

The development, however, will not result in any of SG's offices in Asia closing down. "SG is keeping its securities licences and execution capabilities in Hong Kong, Singapore, Taiwan, Korea, India and Thailand and added that no SG offices in Asia will close," the statement said.

Though there are no official figures on the exact number of employees that will be affected in India, market sources claim that SG has already asked its sales team to leave and retained two people for back and front-office operations. However, SG has not specified the number of people that would be laid-off in India.

According to the statement, in equity, SG will concentrate on its leading equity derivatives activities, warrants and capital guaranteed products, and continue with program trading.

The statement added that SG maintains its strong continuing commitment to corporate and investment banking in Asia-Pacific; its activities in its growing debt finance platform (securitisation, export finance, project finance, asset finance, telecom finance, debt capital markets, fixed income and derivatives, and commodities financing and trading), as well as M&A, private placement and futures brokerage remain unchanged.

"SG will pursue its ongoing strategy as a corporate and investment bank in Asia-Pacific, as it is in the rest of the world," Mr Michel Macagno, CEO Asia-Pacific, SG, said in the statement. "We are maintaining our presence throughout the region with the view to continue providing our clients with a wide range of innovative and integrated financial solutions in its key areas of strength."

The Société Générale Group also renews its strong commitment to its other activities in Asia, private banking and asset management, according to statement.

The Société Générale Group is one of the largest banks in the eurozone employing 80,000 people worldwide in three key businesses: retail banking, asset management & private banking and corporate & investment banking.

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