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Societe Generale (SCGLY) to Divest Operations, Boost Efficiency
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Societe Generale Group (SCGLY - Free Report) has announced the divestitures of its private banking subsidiaries in the United Kingdom and Switzerland and the full 70% stake in its Madagascar subsidiary. These steps are expected to strengthen the company’s capital position.
SCGLY signed agreements with Union Bancaire Privée (“UBP SA”) to sell its subsidiaries, SG Kleinwort Hambros and Societe Generale Private Banking Suisse, operating in the United Kingdom and Switzerland, respectively. UBP SA is a Swiss bank specializing in wealth and asset management.
Further, Societe Generale announced plans to sell off its 70% stake in Société Générale Madagasikara to BRED Banque Populaire.
These divestitures are in line with Societe Generale’s strategic plan to achieve an efficient and more synergetic business model through streamlining. This move enables the company to focus on the development strategy of its private bank through its leading positions in France, Luxembourg and Monaco to cater to its high-net-worth clients.
Per the agreements, UBP SA will take over the entire operations of SG Kleinwort Hambros and Societe Generale Private Banking Suisse, while BRED Banque Populaire will take hold of the activities of the Société Générale Madagasikara as well as the client portfolios and employees associated with these entities.
As of Dec 31, 2023, combined assets under management of SG Kleinwort Hambros and Societe Generale Private Banking Suisse were roughly €25 billion. These deals would be considered as sales of relevant legal entities, with a consideration of €900 million. This move is anticipated to increase the company’s common equity tier 1 (CET1) ratio by approximately 10 basis points (bps). Moreover, the divestiture of Société Générale Madagasikara will boost its CET1 ratio by roughly 2 bps.
All three transactions are expected to be completed by the end of the first quarter of 2025, subject to requisite approvals.
Of late, Societe Generale has been engaged in strategic initiatives to boost its efficiency. Last month, the company agreed to divest its 93.43% stake in Société Générale Bénin, including its branch Société Générale Togo, to the State of Benin. In June, the company signed an agreement with Ageras to sell off its subsidiary Shine, and in April, it signed a memorandum of understanding with Groupe BPCE to divest its professional equipment financing businesses operated by Societe Generale Equipment Finance.
Also in April, the company formed a joint venture with AllianceBernstein Holding L.P. (AB - Free Report) , named Bernstein, which is poised to redefine the landscape of global cash equities and equity research through the combination of the strengths of AB and SCGLY.
Over the past year, shares of Societe Generale have lost 18.2%.
This June, Citigroup Inc. (C - Free Report) completed the sale and migration of its onshore China-based consumer wealth portfolio to HSBC Holdings plc (HSBC - Free Report) China. More than 300 employees of Citigroup were transferred to HSBC as part of the deal.
Per the previously signed agreement, Citigroup will transfer its remaining credit card portfolio in China to Fubon Bank in 2024.
This divestment is part of C’s broader strategy to exit consumer banking operations in 14 markets across Asia, Europe, the Middle East and Mexico.
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Societe Generale (SCGLY) to Divest Operations, Boost Efficiency
Societe Generale Group (SCGLY - Free Report) has announced the divestitures of its private banking subsidiaries in the United Kingdom and Switzerland and the full 70% stake in its Madagascar subsidiary. These steps are expected to strengthen the company’s capital position.
SCGLY signed agreements with Union Bancaire Privée (“UBP SA”) to sell its subsidiaries, SG Kleinwort Hambros and Societe Generale Private Banking Suisse, operating in the United Kingdom and Switzerland, respectively. UBP SA is a Swiss bank specializing in wealth and asset management.
Further, Societe Generale announced plans to sell off its 70% stake in Société Générale Madagasikara to BRED Banque Populaire.
These divestitures are in line with Societe Generale’s strategic plan to achieve an efficient and more synergetic business model through streamlining. This move enables the company to focus on the development strategy of its private bank through its leading positions in France, Luxembourg and Monaco to cater to its high-net-worth clients.
Per the agreements, UBP SA will take over the entire operations of SG Kleinwort Hambros and Societe Generale Private Banking Suisse, while BRED Banque Populaire will take hold of the activities of the Société Générale Madagasikara as well as the client portfolios and employees associated with these entities.
As of Dec 31, 2023, combined assets under management of SG Kleinwort Hambros and Societe Generale Private Banking Suisse were roughly €25 billion. These deals would be considered as sales of relevant legal entities, with a consideration of €900 million. This move is anticipated to increase the company’s common equity tier 1 (CET1) ratio by approximately 10 basis points (bps). Moreover, the divestiture of Société Générale Madagasikara will boost its CET1 ratio by roughly 2 bps.
All three transactions are expected to be completed by the end of the first quarter of 2025, subject to requisite approvals.
Of late, Societe Generale has been engaged in strategic initiatives to boost its efficiency. Last month, the company agreed to divest its 93.43% stake in Société Générale Bénin, including its branch Société Générale Togo, to the State of Benin. In June, the company signed an agreement with Ageras to sell off its subsidiary Shine, and in April, it signed a memorandum of understanding with Groupe BPCE to divest its professional equipment financing businesses operated by Societe Generale Equipment Finance.
Also in April, the company formed a joint venture with AllianceBernstein Holding L.P. (AB - Free Report) , named Bernstein, which is poised to redefine the landscape of global cash equities and equity research through the combination of the strengths of AB and SCGLY.
Over the past year, shares of Societe Generale have lost 18.2%.
Societe Generale Group Price
Societe Generale Group price | Societe Generale Group Quote
Societe Generale currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Step Taken by Another Bank
This June, Citigroup Inc. (C - Free Report) completed the sale and migration of its onshore China-based consumer wealth portfolio to HSBC Holdings plc (HSBC - Free Report) China. More than 300 employees of Citigroup were transferred to HSBC as part of the deal.
Per the previously signed agreement, Citigroup will transfer its remaining credit card portfolio in China to Fubon Bank in 2024.
This divestment is part of C’s broader strategy to exit consumer banking operations in 14 markets across Asia, Europe, the Middle East and Mexico.