Société Générale has offered commodity-linked structured products since 2010, and has steadily enhanced its reputation in the asset class ever since. With a headcount of 10 salespeople covering private banks in Asia, Société Générale’s reputation in the region has been built on fair pricing and long-term relationships, rather than size. Edward Lee, head of cross-asset solutions sales for private banks in Hong Kong and Singapore, attributes the bank’s success this year to these key qualities, concluding that “bringing value-add is the most important aspect of our offering.” In an ever-changing market, offering consistent value to clients has been a key factor of the team’s success.
The oil and gold markets in particular have been unpredictable this year, with oil having broken through the US$100 a barrel mark in June only to fall further, gradually at first but with increasing velocity in the past months. “It has been an uncertain market [this year], and the outlook for commodities is tough,” continues Lee, but Société Générale’s reputation has served them well. Société Générale demonstrated its differentiated offering recently when oil prices suffered a downturn – working closely with clients to moderate potential losses, Société Générale offered delivery in paper oil, such as ETFs, enabling clients to mitigate loss and take profit when the market rebounds.
Also core to the strategy at Société Générale is a belief in innovation. Société Générale has created a number of new products, such as the “Supply and Demand Commodity Index,” a new type of commodity index with an allocation or investment methodology entirely driven by fundamentals, has outperformed the BCOM and the S&P GSCI.
In the midst of a price war which has put pressure on margins across the board, and faced with highly uncertain commodities markets, Société Générale has placed client service and value-added offerings at the heart of its operations, and clients have responded not only by strengthening relationships, but also by voting Société Générale as the 2014 Best Provider of Commodity-linked Structured Products.