SocGen's retail shift seeks to save over 450m euros

Paris

SOCIETE Generale SA expects to cut costs by about 450 million euros (S$728.5 million) by combining its French retail operations with its Credit du Nord subsidiary, as chief executive officer Frederic Oudea seeks to bolster profitability.

The number of branches in the combined division will fall to about 600 to 1,500 by 2025, the bank said in a statement on Monday. The integration will cost as much as 800 million euros, most of which will be booked next year, it said. While the bank didn't disclose the impact on jobs, a bank spokesperson said the change won't result in any staff dismissals.

This revamp caps a difficult year for SocGen, after its capital markets units, once considered its powerhouse, was hit hard when the coronavirus roiled global markets, triggering the bank's worst quarterly losses in 12 years. The lender, which returned to profit, recently announced it would cut 640 jobs, mostly at its investment bank.

SocGen also unveiled targets for its online banking unit, Boursorama, seeking to reach 4.5 million customers by 2025 from 2.5 million currently. The costs to acquire new clients will will result in a cumulative loss of 230 million euros, with the unit turning profitable in 2024, the bank said.

The merged French retail unit will have about 10 million customers including companies and individual savers, according to the statement. The board earlier approved the move in principle and the bank began a review in September headed by Sebastien Proto, who was promoted deputy general manager last summer in charge of the French retail operations.

SocGen fell as much as 1.7 per cent in Paris trading and was down by 1.2 per cent at 9.16 am. The stock has fallen 41 per cent this year, making it the third-worst performer in the 38-member STOXX 600 banking index.

In an effort to lower costs and make retail operations profitable, European banks have announced unprecedented plans to close branches in the last months. The closures were accelerated by the pandemic, which bolstered online usage. BLOOMBERG