SocGen weighs sale of German unit in bid to boost returns
SOCIETE Generale is exploring a sale of its German consumer finance business as part of chief executive officer Slawomir Krupa’s plans to boost the French bank’s valuation by getting rid of non-core businesses.
SocGen is talking to advisers as it weighs offloading Hanseatic Bank, the Hamburg-based bank it owns in conjunction with the iconic German retailer Otto Group, according to sources familiar with the matter. The bank, which has been majority-owned by SocGen since 2005, offers consumer loans, credit cards, insurance and factoring, according to its website.
The deal could fetch a few hundred million euros, the sources said, asking not to be identified discussing non-public information. A representative for Societe Generale declined to comment.
Founded in 1969, Hanseatic Bank was created by Werner Otto as a way to allow customers of his retail business to finance their purchases. Today, the business has 445 million euros (S$649 million) of total equity and employs more than 500 people, according to a filing.
The unit is profitable and commands a return on equity of 15 per cent, according to one of the sources familiar with the matter.
The disposal adds to a long list of deals planned by Krupa, including the bank’s custody business and its equipment finance division. The 49-year-old CEO has come under pressure after a disappointing investor day which sent shares down after he cut key profitability targets.
The potential sale of the German business comes as Barclays, the UK lender, is also seeking for a buyer for its German consumer-finance business. BLOOMBERG
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