PARIS (MNI) – France’s Societe Generale, like all French banks, is
well fortified against any possible outcome in the Greek debt crisis and
is not in danger, its chief executive officer Frederic Oudea said in a
radio interview Tuesday morning.

“It is not a worrying topic for any French bank, and particularly
for Societe Generale,” Oudea told France’s RTL radio. He noted that his
bank had only E900 million in Greek debt on its books, with ample
reserves set aside against it. The bank’s Greek exposure, he said,
amounts to 0.05% of its capital.

“It’s very small, and we have put the numbers on the table,” he
added. “Any additional effort would be completely marginal compared to
our financial results. Therefore I don’t fear any scenario with regard
to Greece. Even a default does not frighten me.”

Oudea, who is also president of the French Banking Federation,
urged European authorities to deal with the Greek debt once and for all
in one way or another. “The most important thing is to put this subject
behind us because it is fatiguing the markets,” he said. “Fundamentally,
it is representative of the difficulty of Europe in dealing with this
question, while it is in fact a question that is relatively limited in
size.”

Oudea sought to downplay market speculation that French banks,
including Societe Generale, would soon by downgraded, casting it as a
competitive issue among the rating agencies.

It is a matter of “one rating agency that is probably going to
bring its rating…to the levels of the others,” he said. “So it’s more
a matter of bringing all the rating agencies to the same level.” He
added that “French banks are solid; they have good ratings and they will
retain their good ratings. I’m no worried about that.”

On the general economic outlook, Oudea said that Societe Generale’s
scenario was one of moderate growth, not recession. “But added to that
is this fear that seems irrational to us, and which psychologically can
eventually create a recession.”

It is this same market irrationality, he implied, that has
victimized Societe Generale and other French banks recently.

“We have been subjected to scandalous, unfounded rumors,” he said.
“Today we must erase these rumors, erase these perceptions and
re-establish the reality of the facts. Societe Generale is not in
danger…Societe Generale, with regard to the risk perceived by the
market, does not need to be recapitalized.”

He said the governments of Europe must not only dispatch with the
Greek debt issue but also offer reassurances on their own public
finances.

In a separate interview with the German business daily Handelsblatt
published Tuesday, Oudea argued that governments would eventually have
to intervene to deal with the divergence among Eurozone economies.

“Clearly we need more convergence and budget discipline,” Oudea
said. “But I also believe that there will have to be some kind of
transfer mechanism at one point.”

Without calling specifically for eurobonds, he argued that “more
financial solidarity” was needed to deal with public debts: “Otherwise,
investors in the US and Asia might not be able to shake their doubts
about the euro and the Eurozone member states.”

–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com

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