By Andrew Hurst

PARIS (Reuters) - SocGen intends to pay its star players enough to keep them from being poached by competitors as it comes to grips with a $7 billion (3.6 billion pounds) illicit trading loss, the head of the investment banking division said on Sunday.

"I have no doubt a certain number of competitors will try to poach people, but this is not exceptional and will be treated as such and will not impact everyone," bank executive Jean-Pierre Mustier said.

"We will make sure we pay individuals and staff within the investment bank and outside in a way which is suitable to retain them," Mustier told a conference call with journalists.

He said he saw no reason to change the way people were paid "because we have to follow practices in the various activities in the bank."

SocGen's investment bank, which developed a cutting-edge business in financial derivatives, made up about 40 percent of the entire group's net income in the first half of 2007 and has borne much of the embarrassment from the trading loss.

"The core of the business is working well. What happened here is not connected to the products we create for clients, it's not a market risk issue, it's not an issue with managing our risk, it's a fraud."

He said clients had channelled more business to the bank "in a gesture of support" since the crisis became public.

Mustier said he was one person who would not be getting a rise after foregoing his 2007 performance bonus and taking a 50 percent cut in his salary after the rogue trades, blamed on a lone trader, Jerome Kerviel, were uncovered 10 days ago.