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Citerne, Philippe 1949–

Philippe Citerne
1949

Cochief executive officer, Société Générale

Born: 1949.

Education: Ecole Centrale de Paris, undergraduate degree in economics, graduate degree in mathematics.

Career: INSEE (French national statistical bureau), 19721974, project manager; French Ministry of Finance, Forecast Department, 19741979, project manager, then bureau chief of energy, transport, and equipment; Société Générale: 19791984, Economic Research Service staff, then 19841986, director; 19861990, director of financial management; 19901995, director of human resources; 19951997, Resources and Services Division, deputy chief executive officer; 1997, cochief executive officer.

Address: 17 cours Valmy, La Défense, Paris 92972, France; http://www.socgen.com.

His education and early career made Philippe Citerne, co-CEO of Société Générale, France's third-largest bank, look like the typical aspiring French bureaucrat. His management style and opinions about the French way of doing business in the global economy, however, told a very different story.

Citerne earned an undergraduate degree in economics and a graduate degree in mathematics from the Ecole Centrale in Paris, a renowned science and engineering school whose graduates include such French luminaries as Eiffel, Michelin, and Peugeot. He began his career in 1972 as a project manager in the Business Department at INSEE, France's institute for statistics and economic studies.

Two years later Citerne began a five-year stint for the French Ministry of Finance, first as project manager and then as bureau chief of energy, transport, and equipment in the Forecast Department. In 1979, at age 30, he left the confines of the French bureaucracy for a position in the Economic Research Department at Société Générale (known in the press and in general parlance as SocGen).

VARIETY OF POSITIONS AT SOCGEN

Over the next 18 years Citerne worked in a number of departments at SocGen, whose strengths are in retail banking and asset management plus the equity derivatives business it developed in the mid-1980s (about 20 percent of the net profit of the bank). His experiences in the research, financial management, human resources, and information technology departments were to serve him in good stead when he became a top executive. A profile of him in Financial News (April 1, 2002) quoted Citerne as commenting, "You have to be humble and you have to be best of breed as a good manager. But it does help if you understand what is going on in everybody's business."

In 1997 Citerne became co-CEO of SocGen, sharing the title with president Daniel Bouton. Both men found the arrangement highly workable, although it seemed unconventional to outsiders. Citerne described the relationship as a "kind of chemistry. A case of working in practice and theory" (Financial Times, April 1, 2002).

THE BANK WARS

In 1999, despite support from almost half of SocGen's shareholders, the Paribas bank and SocGen failed to merge when Michel Pebereau of the Banque Nationale de Paris (BNP) made a successful offer for Paribas. Four years later, some analysts suggested that a merger between BNP Paribas and SocGen would be an ideal match. The locations of their retail centers and their dominance in differing areas of banking seemed complementary. But bitterness over the past and what some described as a "culture clash" made a merger seem problematic. In the meantime, rumors circulated that SocGen had signed a memorandum of understanding with the pan-European institution Dexia stating that neither of them would consider merging with another bank.

When Xavier Debonneuil, the former CEO of SG, the investment banking division of SocGen, died in an automobile accident in December 2002, Jean-Pierre Mustier replaced him. Mustier's trading background and more active hands-on involvement in day-to-day operations afforded Bouton and Citerne the opportunity to revamp the investment arm of SocGen. Their hiring of several managers who were in their forties was out of the ordinary for a French commercial bank and indicated to global markets that SocGen had become more aggressive and opportunistic. As one Financial News analyst favorably commented regarding the identity crisis at SocGen (April 1, 2003), "If you look at the management of the French banks there are a lot of old people with a lot of experience, but I think it is crucial to have younger people to create a new dynamic."

CITERNE LOOKS TO THE FUTURE

In his profile in Financial News (April 1, 2002), Citerne expressed confidence that retail branch banking, earning half the profits for SocGen, would survive. Because Internet banking had not proved as popular in France as it had elsewhere in Europe, he believed the "customer-facing business," as it is called, would continue to be solid.

In the same article Citerne expressed frustration over French bureaucracy and the 35-hour work week. Of the latter he said, "It's rational and very French. But if it's so clever why isn't the rest of the world following it? Is this really the best that 50 million people can come up with? It works in practice, but does it work in theory too?"

In addition, Citerne had to factor in his government's tendency to interfere with the banking industry if prospective acquisitions appeared to threaten jobs. The rigid French style of doing business contrasted sharply with the more freewheeling environments he experienced in his dealings with other countries.

Citerne clearly planned to continue supporting innovation at SocGen, and he showed a sense of humor and perspective about the banker's life that distinguished him from many of his counterparts. In an interview over lunch he picked up the menu to make a point: "You see this menu? If I showed it to a banker, he would say: 'What if?', and if I showed it to an investment banker, he would say: 'Let's do the deal.' So the trick is to keep steady through the cyclical nature of the business" (Financial News, April 1, 2002).

See also entry on Société Générale in International Directory of Company Histories.

sources for further information

Chernoff, Joel, "First Step: Citerne, Collas Named to Top Posts at SG Paribas; Merger Creates Europe's 10th Largest Manager," Pensions & Investments, February 22, 1999, p. 14.

Morris, Jennifer, "The Crisis of Identity at Société Générale," Euromoney, April 1, 2003, pp. 3642.

Pagano, Margareta, "SocGen's Citerne Laughs Wryly at French Banking," Financial News Online, March 31, 2002.

"SG Won't Raise Its KB Stake for Now, Says Citerne," Europe Intelligence Wire, October 8, 2002.

Wrighton, Jo, "Can Citerne Keep the Peace?" Institutional Investor International Edition, February 1999, p. 14.

Anne Lesser

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