{"id":61549,"date":"2023-09-15T18:32:13","date_gmt":"2023-09-15T22:32:13","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/socgen-open-to-sale-of-equipment-finance-unit-in-strategy-review-sources\/"},"modified":"2023-09-15T18:32:16","modified_gmt":"2023-09-15T22:32:16","slug":"socgen-open-to-sale-of-equipment-finance-unit-in-strategy-review-sources","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=61549","title":{"rendered":"SocGen open to sale of Equipment Finance unit in strategy review -sources"},"content":{"rendered":"
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\u00a9 Reuters. People walk past a logo of French bank Societe Generale in front of the company’s skyscraper at the financial and business district of La Defense near Paris, France September 14, 2023. REUTERS\/Gonzalo Fuentes\/File Photo<\/span>
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By Pablo Mayo Cerqueiro, Mathieu Rosemain and Andres Gonzalez<\/p>\n

LONDON\/PARIS (Reuters) -Societe Generale is open to a sale of its Equipment Finance business as the French bank’s new CEO Slawomir Krupa embarks on a broad strategic revamp, people familiar with the company told Reuters.<\/p>\n

The bank sees the business as non-core, having sold part of its operations in 2020, said the people, who spoke on condition of anonymity. But a transaction may not happen soon because difficult market conditions weigh on the unit’s valuation, they said.<\/p>\n

Krupa, who will present SocGen’s new strategic plan on Monday, will try to convince investors he can boost returns while setting achievable goals in a challenging environment marked by slowing economic growth.<\/p>\n

The bank trades at about a third of its book value, almost on par with Deutsche Bank but half the multiple of its bigger French rival BNP Paribas (OTC:) and Italy’s UniCredit, amid concerns about the company’s exposure to more volatile income from investment banking.<\/p>\n

A spokesperson for SocGen declined to comment.<\/p>\n

Shares in SocGen were trading at 26.6 euros ($28.4) around 10.30 GMT on Friday, fairly flat from the previous close, implying a market cap of close to 22 billion euros.<\/p>\n

The stock is one of the worst performers among the largest European listed banks over the last five years, having dropped 25% for the period, according to LSEG data.<\/p>\n

Yet, the shares have gained some momentum in recent months, and a majority of analysts have a “buy” recommendation on the stock, suggesting the change in leadership has been received positively by the market ahead of the new strategic plan.<\/p>\n

In his first remarks to analysts in his new role as CEO, Krupa said in August his management team had the responsibility of “running a tight ship in terms of our portfolio of activities” and would focus on “long-term value creation”. <\/p>\n

The comments were widely interpreted as a sign that he may shrink or sell some assets as part of his revamp. <\/p>\n

While he is unlikely to commit to major sales of businesses at the upcoming investor day, Krupa may indicate an intention to prune non-core units over time, sources said.<\/p>\n

Rather than naming non-core businesses, SocGen is more likely to outline the group’s growth areas, said one person familiar with the bank’s thinking.<\/p>\n

Societe Generale (OTC:) Equipment Finance provides equipment leasing and financing solutions to manufacturers, dealers and vendors in sectors ranging from transport to industrials.<\/p>\n

The business employed 1,400 people and had roughly 24 billion euros of loans outstanding at the end of last year, including partnerships, based on SocGen’s latest annual figures.<\/p>\n

SocGen is also said to be mulling options for its asset custody division, according to media reports.<\/p>\n

The sale of assets would raise cash at a time when the industry as a whole faces additional requirements under global bank capital rules laid out by the Basel Committee of banking regulators that are due to take effect at the beginning of 2025.<\/p>\n

One key question is whether Krupa can improve the 10% return on tangible equity set for 2025, analysts say. How he intends to manage costs will thus be keenly observed, they say. <\/p>\n

Margins within SocGen’s French banking retail unit will also continue to be squeezed until 2024 because of caps on lending rates and a government-imposed interest rate of 3% on the country’s most popular savings account.<\/p>\n

($1 = 0.9378 euros)<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. People walk past a logo of French bank Societe Generale in front of the company’s skyscraper at the financial and business district of La Defense near Paris, France September 14, 2023. REUTERS\/Gonzalo Fuentes\/File Photo By Pablo Mayo Cerqueiro, Mathieu Rosemain and Andres Gonzalez LONDON\/PARIS (Reuters) -Societe Generale is open to a sale of […]<\/p>\n","protected":false},"author":1,"featured_media":7482,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-61549","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nSocGen open to sale of Equipment Finance unit in strategy review -sources | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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