French banking group Societe Generale has agreed to sell its British and Swiss private banking divisions to Union Bancaire Privée for an estimated price of €900M to achieve “a streamlined, more synergetic and efficient business model”
The sales of SG Kleinwort Hambros and Societe Generale Private Banking Suisse are part of the execution of Societe Generale’s strategic roadmap implemented by the firm’s chief executive Slawomir Krupa.
The assets under management of the businesses to be sold amounted to almost €25 billion at the end of December 2023. Their total sale price is estimated at around €900 million including equity.
The acquiring party is Union Bancaire Privée, UBP SA (UBP), a Swiss bank specialising in wealth and asset management. With the fresh acquisition, UBP will increase its assets under management, which stood at CHF 150.8 billion as of 30 June 2024, by more than CHF 25 billion. The acquisition will take place in two separate transactions. Both are expected to be completed by the end of the first quarter of 2025.
“We are extremely pleased to onboard skilled and experienced teams, and are looking forward to providing clients with an even broader range of high-quality investment solutions. This acquisition represents a meaningful add-on to UBP’s capabilities in Switzerland and reaffirms our long-term commitment to the UK, which will become a new growth engine for the Group.”
Guy de Picciotto, CEO of UBP
For the French lender, the sales are a chance to refocus after a series of restructurings conducted over the past 15 years and build up its capital. The deals are expected to add about 10 basis points to Societe Generale’s CET1 ratio.
Despite the upcoming acquisition, Societe Generale said it would still work on building up its private banking operations, focusing on France, Luxembourg and Monaco.
Its business in Madagascar, Société Générale Madagasikara, will also be reportedly sold to France’s BRED Banque Populaire for an undisclosed sum. According to the press release, BRED Banque Populaire would take over all activities of this subsidiary, as well as all client portfolios and employees within this entity. This deal is smaller and expected to add only 2 basis points to Societe Generale’s CET1 ratio. It is also expected to be finalised by the end of the first quarter of 2025.
According to Societe Generale’s latest strategy, the banking group targets a CET1 ratio of 13% by 2026. The lender’s main objectives are to streamline the business portfolio, enhance stewardship of capital, improve operational efficiency, and maintain best-in-class risk management.
“We will strengthen the Group by shaping a simplified business portfolio, while taking the right actions to build up capital and increase flexibility, structurally improve our operating leverage and maintain our best-in-class risk management.”
Slawomir Krupa, Chief Executive Officer of Societe Generale Group
We have earlier reported that the blockchain unit of Societe Generale received a crypto license, appointed as a virtual asset service provider, or DASP, by the French organization Autorité des Marchés Financiers (AMF).
