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SocGen Selling Small Unit To BPCE: Sensible But Small, Unlikely To Move Spreads

FINANCIALS

SocGen is selling its equipment finance business to BPCEsensible but small and likely not a spread mover for either party but a larger transaction for the buyer than the seller.


  • Only an MoU at this stage but we see few barriers to this going through. This business has EUR15bn of loans (EUR8bn of RWAs) which means it’s only 3% of group loans (2% of RWAs). Price is c.EUR1.1bn (5% of GLE market cap) and will improve the seller’s CET1 ratio by around 25bp but won’t complete until 1Q25.
  • SocGen presented a strategy in Sep-23 to shrink the group cost base and streamline the group’s complexity and this transaction, whilst small, does correspond to this strategy.
  • For BPCE this is around 8.9% of group loans (1.8% of RWAs) so a more meaningful transaction but this is a relatively low-risk business historically. Overall, sensible, small but likely not a spread mover for either party.
  • Next data: GLE 1Q24 results on 3-May and 1H24 results for BPCE on 2-Aug.

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