SocGen set to raise 4.8bn euros
Summary
Because of the financial crisis many banks have loaned large sums of money from the state. Of course, the banks have to repay these loans. For many banks it is very difficult to find a good strategy. This is also the case for the french Societe generale.
Societe Generale (SG) has received 3.4bn euro from the French state to bear the financial crisis. SG has planned to raise 4.8 billion euro in a share issue to pay off the emergency loans the bank received from the French state. The bank offers two shares with a discount of 27 percent for each nine shares existing shareholders own.
The bank has said that this financial operation is also needed to pursue potential takeovers, like the 20% stake of Dexia in Credit du Nord.
SG had a decrease of 52% in profits in the second quarter in comparison with last year. However, since then the bank is improved, as the banking sector in general has started to recover.
In April, Mr. Bouthon, the bank’s chairman, left the bank because of personal attacks against him, saying these attacks could harm the bank. The departure of Bouthon was linked with the aftermath of a financial scandal centred on Jerome Kerviel, who is a rogue trader. Kerviel is accused of losing 4.9bn euro. He was charged with forgery, breach of trust and unauthorised computer use. This trial is planned for the beginning of 2010.
My opinion
I think it is terrible what has happened in the financial sector the past year. The financial crisis is caused by the banks themselves. They were irresponsible, took too many risks. Moreover, many bankers were involved in illegal activities. Jerome Kerviel is such an example. He is accused of losing 4,9 bn euro and he is charged with forgery and unauthorised computer use. The chairman of Societe Generale seemed also involved in this scandal. Eventually, he had to resign.
Because of this kind of behaviour the banks faced serious difficulties in the past year. Then the state had to intervene and grant high loans to the banks.
I think that financial criminals like Kerviel must be punished very hard and I think that banks must learn from the past crisis. I also believe that in the future the government must control the banks more severely.
Source http://news.bbc.co.uk/2/hi/business/8292200.stm
By Annelies Devos
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I think that's a very good and clear article. I agree with you saying that there should be more control on the banks in the future. This crisis has affected so many people and companies and there's so many damage. There are so many innocent people affected because of the imprudence and abuse of the banks.
BeantwoordenVerwijderenPeople have to pay more attention in the future and be aware that whatever it takes, banks only want to earn money. People have to think twice before they give their confidence at banks.
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