Wealth Management

Societe Generale plans sale of UK private banking arm

Societe Generale/Bloomberg

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In 2016, Societe Generale bought the UK wealth management operations of Oddo & Cie’s BHF Kleinwort Benson Group unit and merged it with its own Hambros division.

Saturday 06, July 2019

Societe Generale is considering a retreat from UK private banking just three years after making a major acquisition to expand in the market, reported Bloomberg.

France’s second-largest lender has started to gauge interest from potential buyers for its Kleinwort Hambros business and the bank is working with Rothschild & Co on the deal.

The combined business managed about GBP 14 billion ($17.6 billion) of assets as of the end of last year in offices the UK, Guernsey as well as Jersey and Gibraltar.

Societe Generale has been divesting non-core assets as it seeks to boost its capital ratios. Last year it agreed to sell its Belgian private banking unit to ABN Amro Group and reached a deal to offload its Polish retail arm.

Additionally, the bank has also been exploring a sale of its Nordic equipment leasing operations.

While Societe Generale is exiting its UK business, other banks are bulking up. Union Bancaire Privee agreed to buy London-based wealth manager ACPI Investment Managers last year, while Julius Baer Group is also adding relationship managers under its UK head, David Durlacher.

Private banks have benefited from growing pools of wealth over the past decade amid supportive central bank policies and the rise of billionaires in countries like China and India. In the past years private banks started facing margin pressure due to rising compliance costs and regulatory pressures.

Societe Generale Chief Executive Officer is cutting about 1,600 jobs across the bank and plans to slash annual costs by about EUR 500 million ($564 million).

The bank’s common equity tier-1 capital ratio declined over 2018 and remains below its 2020 target of 12 per cent.

TAGS : Societe Generale, Kleinwort Hambros, ABN Amro Group, Union Bancaire Privee, ACPI Investment Managers

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