Societe Generale, the French banking giant, has agreed to offload its UK and Swiss wealth management businesses to Geneva-based Union Bancaire Privee in a deal worth €900m (£771m). This move is part of the bank’s strategy to divest less profitable divisions.
The London-based SG Kleinwort Hambros and Geneva-based Societe Generale Private Banking Suisse, which are being sold, managed approximately €25bn (£21.4bn) in assets as of the end of last year.
In a separate announcement, SocGen revealed plans to sell its Madagascar subsidiary to Paris-based BRED Banque Populaire. Earlier this year, it was reported that Barclays, a FTSE 100 lender, was considering a bid for SocGen’s UK private bank.
Lloyds, Raymond James and Rathbones were also reportedly invited to place bids.
These sales follow a commitment made by SocGen’s CEO Slawomir Krupa last September to bolster the bank’s capital position and streamline its operations. This led to the sale of its equipment finance unit and most of its Moroccan operations in April, as reported by City AM.
The UK and Swiss transactions are projected to boost SocGen’s CET1 ratio, a crucial indicator of a bank’s financial health, by about 10 basis points. The deals are expected to be finalised in the first quarter of 2025.
Despite these moves, SocGen’s shares have fallen 17 per cent in Paris this year and dropped as much as 7.7 per cent on Thursday after it lowered a key target for its French retail division. Investors have been unnerved by what some perceive as conservative growth and profitability targets.
“These sales are part of the execution of Societe Generale’s strategic roadmap targeting a streamlined, more synergetic and efficient business model, while strengthening the group’s capital base,” the bank declared in a statement.
SocGen will maintain its private banking operations in France, Luxembourg, and Monaco.
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