Societe Generale: Two major strategic initiatives in French Retail
Banking
TWO MAJOR STRATEGIC INITIATIVES IN FRENCH RETAIL
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Press releaseParis, 7th
December 2020
The Group today announces two major
strategic initiatives in French Retail Banking through the planned
merger of Crédit du Nord and Societe Generale, on the one hand, and
the further development of Boursorama, on the other
hand.
With these initiatives, the Group aims
to strengthen its differentiated positioning on the French market
by relying on the complementary nature of a retail banking model
combining digital technology with human expertise, and a fully
digital banking model:
- The combination of the Societe Generale and Crédit du
Nord banking networks will form a new entity at the service of
nearly 10 million customers (corporates, professionals and
individuals). The goal is to be one of the leaders in terms of core
customer satisfaction with our core client base and to establish a
banking model with strengthened profitability, underpinned by the
highest responsibility standards.
- Moreover, the Group has decided to bring Boursorama to
maturity in terms of the number of customers, with the goal of
reaching 4.5 million customers in 2025 and achieving high
profitability.
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Planned merger of Crédit du Nord and
Societe Generale (the VISION 2025 project): a model combining the
strength of human expertise and of digital technology to bolster
customer satisfaction, operational efficiency, and commercial
ambition.
The Boards of Directors of Societe Generale and
Crédit du Nord have approved the launch of the project to merge the
Societe Generale and Crédit du Nord brands after a successful first
step in the transformation of both networks. This decision follows
the study launched on 23 September 2020, which demonstrated the
relevance of such a merger.
Backed by a committed workforce with shared
values, this new entity will strive to maximise customer
satisfaction in order to be one of the leaders in terms of
customer satisfaction with our core client base and to build a
more effective bank perfectly suited to the
sectoral changes under way.
This merger will provide each of our customer
categories (corporates, professionals, affluent and mass market)
with a stronger value proposition, relying in
particular on the respective strengths of both brands.
This new model will offer the best
combination of human expertise and digital prowess. IT
investments focused on a single system (and no longer on two
systems) will result in stronger digital capabilities to allow our
customers to enjoy the simplest, most efficient and fastest
solutions to their banking needs. The increased use of digital
technology will also enable us to offer customers the most
personalised experience possible, and to deliver services that are
better suited to their needs and expectations. In-branch employees
will be able to focus primarily on expert assessment and advisory,
to the benefit of customers, thus increasingly turning day-to-day
banking into a digital, remote activity.
In order to meet customer demand for close
contact and responsiveness, the new entity will rely on a
strong territorial foothold and increased decision-making
capacity at local and regional level. The Group intends to
retain the same territorial footprint while reducing the number of
branches, which is possible due to the high geographic proximity of
the two brands’ branches in many towns and cities. The network will
thus transition from about 2,100 branches at the end of 2020 to
about 1,500 at the end of 2025.
The culture of innovation at
the heart of our model will provide our customers with the best
products and services on the market, whether resulting from the
Group’s expertise or that of external partners, boosted in
particular by an open platform strategy. The Group has a strong and
innovative ambition in terms of savings. Through the recent
conclusion of partnerships with major players in asset management,
the Group is positioned as the first major French bank to
provide a unique offering of savings and investment solutions in an
open architecture system, based mainly on a wide range of
SRI products.
With this merger and the implementation of this
new model, the Group aims to be more proactive
commercially building on the respective strengths of both
brands with core customers, by developing a more personalised
approach in terms of products and services, and by strengthening
partnerships and commercial initiatives in savings and insurance.
By way of example, the wealth management market will be managed in
coordination with Private Banking on account of the similar needs
and expectations of these two customer bases. Throughout the period
of the merger, which the bank will strive to carry out in as short
a time as possible, the two networks will be especially focused on
accompanying clients through regular and personalized
communication.
Lastly, Corporate Social Responsibility
will be central to our model, driving our goal to become a leading
bank in positive impact finance operating with a strong local
presence. The teams will make every effort to uphold our
commitments in the regions, in particular with the roll-out of an
offer adapted to energy transition challenges and the development
of dialogue with local decision-makers, both private and public. We
will also stand by our commitments as a responsible employer,
notably by maintaining the quality of social dialogue with social
partners and by giving more support to employees through a training
plan.
From a financial perspective, the merger of
Crédit du Nord Group and Societe Generale will generate
considerable cost synergies, in particular through
the use of a single IT system by H1 2023, network optimisation, and
the consolidation of Group functions.
The Group’s targets for with the combined entity
are as follows:
- a net cost base reduction of more than EUR 350 million
in 2024 and about EUR 450 million in 2025 compared with
2019, with project costs estimated at between EUR 700 and 800
million (of which approximately 70% in 2021)
- return on normative equity under Basel 3 of around 11%
to 11.5% in 2025, which is equivalent to more than 10%
under Basel 4.
This
project will be subject to consultation with social partners and to
the agreement of competent authorities.
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Boursorama: a winning digital model to
become one of the leading French banks serving individual customers
with the best level of satisfaction and high
profitability
The undisputed leader of French online banks
with more than 2.5 million customers, and the leading French bank
in terms of customer satisfaction1, Boursorama today announces a
new strategic phase.
Having won more than 2 million customers in five
years, Boursorama intends to continue its investments aimed at
onboarding new customers over the next few years and has now set
itself the goal of reaching more than 4 million customers
in 2023 and 4.5 million in 2025. Boursorama will thus
position itself among the major retail banks in France.
After achieving its target in terms of number of
customers, Boursorama intends to generate high
profitability by relying on its highly efficient operating
model.
Accordingly, following a phase of accelerated
customer acquisition until 2023, which will lead to a cumulative
loss of about EUR 230 million over the period, Boursorama targets
net income of around EUR 100 million in 2024 and around EUR 200
million in 2025, representing a return on normative equity of more
than 25% (under Basel 4).
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Frédéric Oudéa: “In a changing French market
undergoing several developments accelerated by the COVID crisis, we
are today confirming our ambition to differentiate the Group by
building a unique French retail banking model based on two strong
and complementary pillars.
On the one hand, the combination of our networks
allows us to build a first-rate bank combining human expertise with
digital prowess, positioned as the champion of savings and the
leading bank for corporates and professionals with nearly 10
million customers. Our teams on the ground and at headquarters are
proactively involved in a value-creating project for our customers
and employees.
On the other hand, we are bringing the
differentiating model of Boursorama to maturity to make it one of
the leading banks in France with 4.5 million customers by 2025, a
leading position in terms of satisfaction, and high
profitability.
With this change in our businesses, we are
building a model that will improve the satisfaction of all our
customers, fully committed to the transformations under way in our
society and our economy and addressing the Group’s profitability
objectives.”
Press Contacts
Jean-Baptiste Froville_01 58 98 68
00_jean-baptiste.froville@socgen.com Corentin Henry_01 58 98 01
75_corentin.henry@socgen.com
1 Source: Opinionway (October 2020)
- Societe Generale_ Two major strategic initiatives in French
retail banking
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