On October 17, SG hired Fook Cheong Woo, Sean Lee and Kyle Shin to do respectively oils & petrochemicals, telecoms and technology research. In what must be regarded as a dreadful irony, SG's head of Asian research, Sriyan Pietersz said at the time of the hires: "It is always a pleasure to see talented individuals joining us."

There can be little doubt that these talented individuals must now be ruing their decision to join. However, they had due warning. There has been speculation since January that SG might exit Asian equity broking and in another brutal day for the industry it finally has. (See related article below, 'Leave la France, volume two' from January)

SG has announced that it is exiting the brokerage business, and will close its equity sales and research operation, shedding 180 jobs (or 9% of its Asian staff). Back in January the closure of the firm's offices in Malaysia, Indonesia and the Philippines had already looked to be a sign that SG had lost its appetite for Asian equities. When its highly regarded head of Hong Kong research, Philip Mok went to Deutsche, this was viewed as a further sign of slippage. Further evidence of this was China specialist, Li Hui going to CLSA.

SG, however, continually rebutted claims that it was exiting the broking business. In a memo from Asia boss, Christian Gomez, he wrote: "I would like to comment on the recent transformations in our organization... At the highest level of SG, the decision has been made to be present in Asia... I wish to reiterate that SG's independence of views is well appreciated by institutional clients and we enjoy already better rankings in our sectors in Asia than anywhere else around the globe."

SG's global co-head of investment banking, Stephen Brisby said in February that a brokerage business was essential: "It is essential. We are servicing a core group of clients, and in servicing that community we want to be a strategic partner of theirs and in a dialogue with them from the board level down. You cannot have the strategic dialogue with corporates if you don't address their equity needs." (The full interview can be read in the related article below.)

SG is now saying that it is exiting the brokerage business in the region. In a written statement yesterday the French bank said: "The conclusion was reached that, in light of the current market conditions, the development of this activity in line with the firm's own targets of sustainable profitability was not achievable."

On the equities side, SG will now only focus on equity derivatives and program trading. Across Asia it continues to be a leader in this type of derivative product as well as project finance and securitization.

However, on the broking side, like WI Carr before it, the latest move is further evidence of how poorly French banks have integrated their acquisition of Asian broking firms; as well as evidencing the cruel overcapacity in the industry as a whole. (For further detail and predictions on the restructuring of the Asian broking scene, see also FinanceAsia magazine, March 15, 'A super eight to dominate?').