Société Générale signed a memorandum of understanding with French banking company Group BPCE for the divestment of its equipment finance business for a purchase price of €1.1 billion ($1.18 billion).
The transaction is expected to close in Q1/25. According to Société Générale, once completed, the transaction would have an estimated positive impact of approximately 25 basis points on its CET1 ratio. Société Générale noted that its equipment finance activities in the Czech Republic and Slovakia were not part of the transaction.
Société Générale’s equipment finance business is currently active in the transport, industrial equipment, technology, medical and renewable energy sectors and had outstanding loans of nearly €15 billion ($16.09 billion) at the end of 2023, with approximately €8 billion ($8.58 billion) in risk-weighted assets.
“Within Société Générale, SGEF has developed its international activities to achieve a unique geographical coverage,” Odile de Saivre, CEO of Société Générale Equipment Finance, said. “SGEF’s employees are recognized experts who work with our customers and partners to build innovative equipment financing solutions. With the proposed Groupe BPCE project, I am delighted to open a new chapter firmly oriented towards growth thanks to the strong alignment of our activities.”
The sale displays diverging strategies from Société Générale and BPCE, as Société Générale said the transaction was part of its larger strategic plan announced last September that aims to create a more streamlined and efficient business model while strengthening its capital base.
“During the presentation of the group’s strategy in September 2023, we affirmed Societe Generale’s ambition to be a rock-solid and sustainable top tier European bank,” Slawomir Krupa, CEO of Société Générale, said. “We announced that the group would take strategic decisions to simplify its business portfolio and shape a more integrated, competitive and synergetic business model. The signing of the memorandum of understanding with Groupe BPCE for the sale of SGEF’s activities illustrates the strategic roadmap’s execution that creates value for all our stakeholders.”
Meanwhile, BPCE said it is currently seeking to expand its European specialized financing footprint, particularly in the leasing business, as part of a larger strategic plan that it expects to unveil in June. The addition of Société Générale’s equipment finance business would build on the activities of BPCE’s equipment leasing subsidiary, BPCE Lease,
“Looking ahead to the group’s new strategic plan, this transaction underscores our growth ambitions in Europe, intensifies our revenue diversification and changes our dimensions in this business,” Nicolas Namias, CEO of BPCE, said. “The choice of investing in this growing business serves the goal of financing the real economy, strengthens the group’s offering for the energy transition and the real economy, and is consistent with our cooperative nature. We have ambitious growth plans for SGEF, its clients, and its vendor and bank partners, and have full confidence in being able to execute them by leveraging the recognized talent of SGEF’s management team — particularly that of its Chief Executive Officer Odile de Saivre — and of its staff, for the benefit of all Groupe BPCE stakeholders and particularly for customers of the Banque Populaire and Caisse d’Epargne networks.”
