INSTANT VIEW - SocGen hit by huge internal fraud

PARIS (Reuters) - Societe Generale, France's second-largest listed bank, said on Thursday it has uncovered a fraud which will have a negative impact of 4.9 billion euros (3.7 billion pounds) on the group.

Following are comments on the announcement:

ARTURO DE FRIAS, HEAD BANKING ANALYST, DRESDNER KLEINWORT:

"We have seen this kind of thing before in other places. Some people are saying they do not believe this was a fraud but it is hard to say anything before we have heard the bank's conference call with analysts."

FORTIS ANALYST CARLOS GARCIA IN MADRID:

"The most serious thing is that this puts into doubt the risk management systems at some banks. You can't suddenly announce from one day to the next a hit of $7 billion (3.6 billion pounds). In the light of this, what we've done is to downgrade banks that are very linked to trading income or whose capital base is weak."

MADRID-BASED TRADER:

"It's amazing to me. The idea that a trader could hide such a big position is beyond me. Nick Leeson (the disgraced Barings trader) was much less."

FREDERIC HAMM, FUND MANAGER AT AGILIS GESTION, PARIS:

"SocGen shares are likely to open lower. This impacts the reputation of the bank."

ION-MARC VALAHU, HEAD OF TRADING AT AMAS BANK, SWITZERLAND:

"I am sorry but I have a hard time buying the fact that a trader was able to set up a 'secret trade' of 4.9 billion without anybody finding out."

NOTE FROM UBS SECURITIES:

The bigger issue will be (1) the rights issue and (2) loss in credibility for the derivatives business (3) possibility of a BNP Paribas bid.

(Editing by Paul Bolding and David Holmes