Soc Gen sees fixed income trading boom

Fixed income, currencies and commodities income surged 16% in 2016.

Societe Generale’s fixed income, currencies and commodities trading income surged 16% in 2016, despite the group’s global markets revenues remaining relatively flat.

Fixed income trading boomed in 2016 compared to equities, where Societe Generale saw income fall 17% in 2016 compared to the year prior.

The French bank explained it managed to capitalise on its positions in structured products to respond to increased client demand.

“This good performance helped offset the drop in volumes, despite rising markets, notably on cash activities, where the Group confirmed its leadership position,” the French bank stated in its earnings release.

The global markets and investors services revenues fell 1.1% in 2016 compared to 2015 to €5.9 billion, with fourth quarter activity making up some of the lost sales.

“After the “wait -and-see” attitude of investors which marked the beginning of the [fourth] quarter, following on from the previous quarter, client activity rebounded sharply in the wake of the US elections, underpinned by more marked trends, notably in foreign exchange, rates and commodities,” Societe Generale said.

Societe Generale recently ramped up its efforts in the fixed income trading market by being a part of a new bond trading platform.

It was one of six major investment banks that partnered with Origin to launch an electronic trading platform for the €1 trillion private placement bond market.

The platform simplifies issuance in the medium-term note private placement market by acting as a central information source.

Discussing the full-year results, chief executive officer, Frederic Oudea, explained that in a less buyout economic environment, the bank simplified its business model, optimised capital allocation and invested in businesses of the future.

“The balance sheet has improved and all our regulatory capital and liquidity ratios are above the regulators’ requirements.

“Based on these solid foundations, Societe Generale intends to continue with the adaptation and digital transformation of its businesses,” he said.