PARIS (Reuters) - France’s Societe Generale said on Wednesday its deputy chief executive in charge of investment banking activities, Didier Valet, was leaving the group “following a divergence of approaches regarding management of a specific legal matter”.
SocGen is losing its investment banking head just at the start of its new three-year plan, aimed at boosting returns and protecting dividends in the face of uncertainty over the size of potential fines linked to several legal settlements with the U.S. authorities, expected over the coming weeks or months.
The bank did not give any more details in its statement about the legal matter and said Valet resigned in order to preserve the bank’s “general interests”.
“Following a divergence of approaches regarding the management of a specific legal matter which predates his appointment as deputy CEO, Didier Valet ... submitted his resignation,” the bank’s statement said.
The “divergence of approaches” related to investigations over the suspected rigging of the London interbank offered rate (Libor), a key interest rate used in contracts worth trillions of dollars globally, a source familiar with the matter said.
SocGen is one of several banks to be caught up in investigations into the rigging of Libor around the time of the global financial crisis. U.S. authorities charged two former SocGen managers in August with taking part in a scheme to manipulate the global U.S. dollar Libor benchmark.
“It’s the biggest thing to happen in the group since the departure of Jean-Pierre Mustier,” an insider said of Valet’s departure, referring to what happened in 2008 when Mustier, head of the investment bank at the time of the Jerome Kerviel trading scandal, quit. Mustier is currently CEO of Italy’s Unicredit.
“Didier Valet succeeded in transforming the corporate and investment banking activities, building a profitable and sustainable model,” SocGen said.
Valet, a close and long-time ally of chief executive Frederic Oudea, started his career at SocGen in 2000 and was chief financial officer from 2008 to 2012. He had been at the head of investment banking activities since 2012.
“We have now been working together for over 15 years. I would like to express all the respect and friendship I have for Didier,” Oudea told staff in an email seen by Reuters.
Under Valet, the bank has worked on making investment bank revenue less volatile by increasing the share of fixed income activities versus equities.
The bank said his replacement would be announced shortly.
Reporting by Maya Nikolaeva; Editing by Leigh Thomas and Mark Potter