Would you join a French bank without a guarantee?

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It’s no secret that Société Générale wants to hire. Back in May, it declared its intention of recruiting 20 senior corporate financiers and 15 M&A bankers in Western Europe and Moscow in the near future.

So far, it doesn’t appear to have hired any of them. Recruitment activity has been equally subdued at other French banks. Paribas recruited Stefano Blotto from Merrill Lynch in April, and Calyon hired Mike Mayo from Deutsche into its US business in March, but that’s about it for big name additions.

Yesterday, SocGen chief exec Frédéric Oudéa gave an indication why. “French banks have formed a contract with the Government and the regulator that they will not pay guaranteed bonuses for more than one year,” he told The Times.

If it won't offer guarantees, recruiters say SocGen’s unlikely to get anywhere. “They’re going to have to pay guarantees in London,” says the head of investment banking at one search firm. “There’s strong demand for revenue accretive people at the moment.”

It doesn't help that rival banks are said to be offering guarantees. Barclays is building in equities and ECM and is said to be offering generous multi-year payouts. Citigroup and Bank of America are said to be offering them too.

The headhunter adds that SocGen’s lack of strength in M&A makes guarantees all the more important in London. Although it was fourth for M&A in France in the second quarter, it ranked outside the top 20 in Europe. “SocGen are very strong in their home market, but not elsewhere. They’re also seen as highly political,” he adds.

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