Societe Generale laid off two dozen members of its U.S. fixed-income staff on Monday, saying it would limit its debt businesses to those areas which had been "historically profitable."
The $450 billion French bank is quitting the U.S. mortgage-backed securities and U.S. high-grade corporate bond businesses, said Sara Campbell, a spokeswoman for the bank. Some 24 traders and salespeople from those areas were given their notice on Monday, she confirmed.
As part of a drive under chairman Daniel Bouton to improve the bank's return on assets, Societe Generale will focus on areas viewed as strategically important and that have historically made returns, such as government bonds, Ms. Campbell said. In the United States it will work on strengthening its primary dealership, including Treasury and repurchase agreement trading and sales.
Pierre Schroeder, managing director and head of debt, currency commodities products in the United States, will continue to lead the 170-person group.
Since the French bank began to expand its U.S. corporate bond business in 1997, it has lagged behind other fixed-income areas, like foreign exchange, in profitability. Last year the group failed to make the top 25 in underwriting for mortgaged backed securities and investment grade corporate debt, according to Thomson Financial Securities Data.
In September 1998, Canadian Imperial Bank of Commerce shut down its mortgage-backed securities operation, laying off 20 people, following similar cutbacks at UBS Securities and HSBC Securities.