BRD: The strategy for Romania remains unchanged

Societe Generale uncovered the fraud by one of its traders, which will cost the bank €4.9 bln, according to a statement by the second-largest bank listed bank in France. An offer of resignation by its Chairman and Chief Executive, Daniel Bouton, was rejected by the group’s management. The trader involved in the fraud will be fired, as will his supervisors.

The French bank yesterday announced that total losses estimated for 2007 amount to some €7 bln, part of this a fourth-quarter 2007 write-off of €2.05 bln from its U.S. exposure. In spite of these losses, the bank will post a profit of €600-800 million, albeit significantly reduced compared to net results of €5.221 bln in 2006.

Trading in BRD-Groupe Societe Generale shares, among the most liquid on the Bucharest Stock Exchange (BVB), was suspended yesterday, following the announcement regarding the fraud. BVB’s President, Stere Farmache, declared that he is awaiting a communique from BRD-Groupe Societe Generale, in which officials clarify the bank’s position.

According to most recent reports, Societe Generale controls 58.32 percent of BRD-Groupe Societe Generale shares. BRD also owns some 18 percent of BVB’s capitalization (some €5.5 bln).