Source Pravda.Ru

Societe Generale SA to sell 5.5 billion euros shares after fraud and writedowns

France's second- largest bank by market value Societe Generale SA is going to gain 5.5 billion euros ($8.1 billion) selling shares after a trading fraud and subprime- related writedowns depleted capital.

The bank found out last weekend that a trader in Paris had secretly set up positions that will cost the company 4.9 billion euros before tax, Societe Generale said in an e-mailed statement today. The trader, who wasn't identified, went beyond permitted limits on futures linked to European stock indexes.

"It's an enormous number,'' said Jean-Paul Pierret, a strategist at Dexia Securities France.

Societe Generale will also take 2.05 billion euros in writedowns related to credit market turbulence following the collapse of the U.S. subprime mortgage market.

Société Générale is one of the main European financial services companies and also maintains extensive activities in others parts of the world. It is headquartered in France with the main head office in Tours Société Générale in the business district of La Défense west of Paris. The three main divisions are Retail Banking & Specialized Financial Services (particularly in France and Eastern Europe), Corporate and Investment Banking (Derivatives, Structured Finance and Euro Capital Markets) and Global Investment Management & Services.

Société Générale is one of the oldest banks in France. The original name was Société Générale pour favoriser le développement du commerce et de l'industrie en France (English: General Company for the Support of the Development of Commerce and Industry in France). Société Générale is often nicknamed SocGen in the international financial world.

The long term debt of the group is currently ranked AA by S&P, Aa2 by Moody's and AA by Fitch.

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