SocGen sees private banking consolidation

By Neil Chatterjee and Harry Suhartono

SINGAPORE (Reuters) - Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) sees private banking consolidating after market turmoil hammered the sector, throwing up growth opportunities through acquisitions of rival players, an executive said on Monday.

"There will be a consolidation of the private banking industry. There will be a redistribution of players, a concentration of players and a restructuring of players," said SG Private Bank's Singapore and South Asia head Pierre Baer at the Reuters Wealth Management Summit in Singapore.

"We think we stand to benefit from that and we will be looking to make acquisitions," he said. "Now is the time for us to grow."

Baer said SG's private banking arm was also looking to grow organically and was still hiring bankers, though he declined to give any targets. But he also said he expected bankers from rival companies to leave a sector which has seen investors "shell-shocked."

Baer said the SG private banking arm still saw revenues up 7 percent in the first half of the year, and it was aiming to build assets under management faster than the industry, which has recently seen a growth rate of around 28 to 30 percent.

He said SG was not advising high net worth individual clients focused on a short one-year horizon to go into hard hit equities markets, which jumped on Monday after rescue steps by world policymakers, since it sees market turmoil spilling over into the real economy and a recovery timeframe of a couple of years.

"If the client is a long-term investor yes we would certainly be looking for value. I don't think we would buy today, but we are getting close to that level."

Baer expects governments to take further regulatory steps, with the relationship between regulators and banks to be determined by liquidity and capital.

"After this weekend it seems to be accepted that there's a certain security net. Policy makers need to give confidence that it's not a bottomless pit," Baer said, adding they needed to recapitalize the banks. "We expect more regulation."

Baer, who said his own investment portfolio had fallen 15 percent this year, said SG had advised clients to raise cash levels early this year and was now advising investment in bonds and structured products with capital guarantees, despite the latter's recent bad image.

He saw opportunities to make clients' money from an easing of tight money markets, with other possible investment themes being a rising U.S. dollar or the recent slide in oil prices.

For those sticking to cash he recommended the U.S. dollar, rising from safe haven investment flows, and for fixed income "boring" triple A rated bonds. He saw undervalued stocks in Japan but said an Asian recovery would depend on how much China and India could rely on domestic demand.

"Stocks can be cheap, but are you sure they won't get cheaper?" he said. "It's back to basics -- probably positive for the industry."

(Additional reporting by Kevin Lim and Melanie Lee; Editing by Jon Loades-Carter)