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Bank: Societe Generale sells four of its African subsidiaries

PERSPECTIVE. With a historic presence in Africa, the French bank intends to sell subsidiaries, especially in countries where it is struggling.

By Africa Point

Societe Generale, the French bank with the most presence on the continent, is starting to reduce its footprint in Africa by closing four of its subsidiaries.

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VShas moved towards Societe Generale in Africa. On the one hand, the French bank wishes to assert itself in its African strongholds of Côte d’Ivoire, Morocco and Cameroon; on the other, it is selling some of its subsidiaries, the smallest ones, particularly in Chad, in Equatorial Guinea and Mauritania. Announced several months ago, the agreement with two African banking groups for the sale of its subsidiaries in these three countries took place this Thursday, June 8, just a few days after the appointment of Slawomir Krupa as head of the banking giant.

This disengagement follows in the wake of those of several French (BNP Paribas, Crédit Agricole, BPCE) and British (Barclays and Standard Chartered) banking groups, which have withdrawn completely or have drastically reduced their wing on the African continent, over the past five years.

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A step-by-step disengagement

The two pan-African banking groups Vista and Coris Group, led respectively by Burkinabè bankers Simon Tiemtoré and Idrissa Nassa, “would take over all of the activities operated by Societe Generale in Congo, Equatorial Guinea, Mauritania and Chad, as well as the ‘entirety of customer portfolios and all of the employees within these entities,’ develops a press release from the bank, which also announces the opening of a strategic reflection on its subsidiary in Tunisia.

The Societe Generale group, which has a long-standing presence in Africa, including 100 years in Morocco, 50 years in Côte d’Ivoire and Senegal, “intends to concentrate its resources on markets where it can position itself among the leading banks , in synergy with the other businesses of the group”.

These operations could be carried out “by the end of the year” and provide for the total sale of the group’s shares in its local African subsidiaries: Societe Generale Congo, Societe Generale de Banques en Guinée Equatoriale, Societe Generale Mauritania and Societe Generale Chad. , currently held respectively at 93.5%, 57.2%, 95.5% and 67.8% by Société Générale.

The banking group also holds 52.34% of the capital of the International Union of Banks (UIB), a subsidiary of Societe Generale in Tunisia, and announces that it has also “opened a strategic reflection on its participation” in the entity. “This approach aims to explore the possible options allowing the UIB to better implement its development potential in the years to come, for the benefit of its shareholders, customers and employees. In this context, a non-exclusive process is engaged”, according to the same source.

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Several factors

Beyond the difficulties related to profitability and financial indicators, other factors, economic but also geopolitical, are pointed out to explain the disengagement of the major French and British banks on the African continent. In the case of France, there is the loss of economic influence in Africa, one of the main reasons put forward by the experts. The other explanation is to be found in the strong competition that now prevails in Africa, with China, Turkey and other players who are also investing in the banking sector.

Not to mention the advent of African, Moroccan, Egyptian, Nigerian or South African banking champions, such as the Moroccans Attijariwafa bank, Bank of Africa, Banque Populaire, or Coris Bank of Burkina Faso, the Anglophones of First Bank, Standard Bank Group, Absa Bank, the pan-African Ecobank, the Nigerian United bank for Africa, or Oragroup.

So far, Société Générale has maintained its presence in Africa at all costs, in particular through Grow With Africa (“grow with Africa”), its African strategy based on organic growth and no longer on only purchases.

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