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Here’s how French banks lost big in the complex world of structured finance

Société Générale and BNP Paribas said a wave of dividend cancellations as a result of the coronavirus and increased hedging costs were among the causes of their structured-product-linked losses

France’s biggest banks reported substantial trading losses in recent weeks, highlighting the risks they have accumulated selling complex investment products promising high returns when markets are calm.

Société Générale SA and BNP Paribas SA both reported roughly €200m ($216m) hits to their revenue related to “structured products” the banks cook up for yield-starved clients. During good times, these products can generate substantial fee income for the banks.

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