Societe Generale and Crosby Financial Holdings will set up a new investment bank with Societe Generale taking control of Crosby's stockbroking and equity corporate finance operations for an undisclosed amount. The move comes just three days after Crosby chairman and chief executive Timothy Beardson said he had no intention of giving up control of the firm that he has spent 12 years building. It is the last independent agency brokerage in the region. Mr Beardson will remain as chief executive of the new bank 'until a replacement has been nominated by Societe Generale'. Mr Beardson plans to concentrate on Crosby's fledgling fund management and fixed income businesses - all that's left after yesterday's transaction. Societe Generale, the third-largest French bank, will hold a 75 per cent stake in the new investment bank, yet to be named, while Crosby will hold the remainder. The new venture will receive a capital injection of US$40 million, half from Crosby and half from Societe Generale. The French bank will throw the weight of its substantial balance sheet behind the new venture. Societe Generale global equities managing director Yves Tuloup said: 'The size of Societe Generale's balance sheet means we will not have to turn down any deals for lack of capitalisation.' Crosby's small capital base of $46 million was holding the firm back, market sources said. The firm had suffered the loss of more than 10 senior staff in recent weeks and other key staff over the years, partly because of inability to buy seats on stock exchanges, amongst other reasons. Mr Beardson said earlier this week that Crosby planned to increase the amount of capital available to the group to more than $200 million to boost investment banking. The capital increase was necessary to participate in more 'bought deals' or private equity placements that might be taken on the firm's balance sheet for a time. Societe Generale took a 49 per cent stake in Crosby Securities in 1992 and worked together with Crosby on several deals, including a recent private placement of $187 million worth of Giordano International shares. Societe Generale's strong global presence in equity derivatives would complement Crosby's broking operations perfectly, Mr Tuloup said. 'I cannot think of a single area where we overlap,' he said. Mr Tuloup said he would not characterise yesterday's acquisition as a takeover. 'We have a strategy of buying into teams,' he said. Societe Generale has moved into equity broking globally through the acquisition of existing operations in a number of centres. Explaining his change of heart, Mr Beardson said: 'We have indeed decided to take less than a 50 per cent share holding in order to have a meaningful share in something that has the prospect to become the number one investment bank in Asia.' The focus of the new bank will be in line with Crosby's current operations - equity broking and investment banking in Asia outside of Japan. Crosby has a presence in Hong Kong, Singapore, Malaysia, Jakarta, Thailand, India and China. With an expanded capital base, operations in Korea and Taiwan are a possibility. In Hong Kong, Societe Generale's Hong Kong based subsidiary is one of the most active arrangers of syndicated loans and debt securities in the territory, but the bank has no equity broking operations here. Fimat Derivatives, a Societe Generale subsidiary, deals in a wide range of equity-linked derivatives through its Hong Kong branch.