The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Investment Banking: Pardon my French

Jean-Pierre Mustier wants to make Société Générale a global powerhouse--and win the respect of investment banking rivals in London and New York -- by building on the bank's dominant position in equity derivatives.

This article appears courtesy of Institutional Investor

By David Lanchner

Jean-Pierre Mustier has racked up a pretty impressive performance. In just three years the head of corporate and investment banking at Société Générale has extended his bank's worldwide lead in the complex and rapidly changing market for equity derivatives and developed powerful franchises in structured finance, euro-denominated bond underwriting and project finance. And all this while attaining a level of profitability unmatched by any of its European rivals: a stunning 44.4 percent aftertax return on equity last year.

But for all these successes, Mustier is more frustrated than satisfied. Most equity analysts value his operation at a multiple of eight times estimated earnings in determining price targets for Société Générale, reflecting concerns about the sustainability of profits. Wall Street rivals Merrill Lynch & Co., Morgan Stanley and Goldman Sachs Group were trading at multiples of 12, 11 and 10.5 times forecast 2007 earnings, respectively, late last month. Why the discrepancy? Ask Mustier and he has a ready answer: cultural prejudice.

"Because capital markets evolved more rapidly in the U.S. and the U.K. than they did in continental Europe, investment banks are judged through an Anglo-Saxon filter," he contends.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree