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Societe Generale Unit Builds U.S. Energy Trading Business

SG Corporate & Investment Banking (SG CIB), a division of Paris-based Societe Generale, said it has hired six natural gas and power traders at its commodity derivatives desk in New York and plans to ramp up its U.S. energy trading business, extending its strong banking position from Europe into the U.S.

The move coincides with a trend in the U.S. energy markets since the credit collapse following Enron's demise. Many large international banks and financial services firms have been rapidly growing their energy trading and energy financial services operations over the last several years.

For example last year, Merrill Lynch purchased Entergy Koch's energy trading business. UBS, a subsidiary of Switzerland-based UBS AG, beat out Citigroup in 2002 as the high bidder for Enron Corp.'s once mighty wholesale energy trading unit. Both of those firms are now among the largest wholesale natural gas marketers in North America (see http://intelligencepress.com/features/rankings/gas/). Morgan Stanley also remains a top power marketer, as other banks, such as Bank of America and Goldman Sachs, grow their energy trading operations.

SG CIB said the six senior traders that it added to its U.S. platform came from UBS, Merrill Lynch and some industry companies such as Constellation Energy. It hired Doug Gilbert-Smith and Andrew Lewis from UBS. John McPherson was hired from Constellation Energy Group, and John Protano was brought on board from Merrill Lynch. Nick Bate was hired from Gaselys, and Kevin Lambert from PPM Energy. The new hires are all based in New York and report to Christophe Renaud, head of commodity derivatives trading for the Americas.

SG CIB said its expansion into natural gas and power trading builds upon its presence in crude oil trading in the U.S. and its strong base of market experience in the global energy and metals markets, including coal, freight, plastics and carbon dioxide.

"The U.S. is the largest energy market in the world, and a region where we've decided it is vital to commit significant resources, expand our presence and demonstrate our capabilities to our U.S. customer base," said Francois-Xavier Saint Macary, global head of commodities trading for SG CIB. "Already a leading participant in Europe and Asia in energy and metals trading, our continuing expansion in the U.S. market will allow us to provide our clients with the expertise and products they need from a truly global commodities trading platform."

In a related move, SG CIB has also recently bolstered its corporate energy marketing team in the U.S. "Although we've already strengthened our corporate energy marketing franchise in the U.S. with recent quality hires from Bank of America, Barclay's, PSEG and Morgan Stanley, we fully expect to add additional hires that will round out the overall platform and deliver the quality service that our clients have come to expect," said Adrian Lismore, head of energy sales and structuring group for the Americas.

The SG CIB commodities team is a global participant in the precious metals, base metals, energy and commodity index markets. The team has developed expertise in trading derivative products (including forwards, options and swaps) to provide producers, refiners, end-users, traders, financial institutions, investors, funds and other businesses with hedging solutions and risk management strategies. Parent company Societe Generale is one of the largest financial services groups in the Euro-zone. The group employs 92,000 people worldwide.

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