French bank Société Générale has struck a deal to sell its UK and Swiss wealth management businesses to Geneva-based Union Bancaire Privée for €900m (£771m) as part of efforts to offload less profitable divisions.
SocGen said on Monday that the units being sold – London-based SG Kleinwort Hambros and Geneva-based Societe Generale Private Banking Suisse – had roughly €25bn (£21.4bn) in assets under management as of the end of last year.
Separately, SocGen said this morning that it is also selling its Madagascar subsidiary to Paris-based BRED Banque Populaire.
It was previously reported that FTSE 100 lender Barclays was weighing up a bid for SocGen’s UK private bank in February. Lloyds, Raymond James and Rathbones were also said to have been invited to bid.
The sales come after SocGen’s chief executive Slawomir Krupa pledged last September to strengthen the bank’s capital position and slim it down, with it selling its equipment finance unit and most of its Moroccan operations in April.
The UK and Swiss deals are expected to add about 10 basis points to SocGen’s CET1 ratio, a key measure of a bank’s financial strength. The transactions are expected to complete in the first quarter of 2025.
Still, SocGen’s shares are down 17 per cent in Paris so far this year and tumbled as much as 7.7 per cent on Thursday after it cut a key target for its French retail division. Investors have been spooked by what some argue are 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 said in a statement.
SocGen will continue to operate private banking businesses in France, Luxembourg and Monaco.