Equipment Finance Division of SocGen to be Sold to BPCE for $1.2 billion

Societe Generale (SOGN.PA) announced on Thursday that, as part of a larger divestment strategy, it has agreed to sell its professional equipment financing business to French rival BPCE for 1.1 billion euros ($1.2 billion). This move increased the company’s share price by more than 3%.

The sale is a part of Slawomir Krupa, the CEO’s strategy to simplify the third-biggest listed bank in France and concentrate on creating long-term value. Additionally, Societe Generale just sold properties in Africa.

Societe Generale stated that its Common Equity Tier 1 (CET1) ratio would increase by approximately 25 basis points upon the closing of the sale of the majority of Societe Generale Equipment Finance, which is anticipated to occur in the first quarter of 2025. The highest grade of regulatory capital that banks possess is called CET1.

Societe Generale Equipment Finance offers manufacturers, dealers, and vendors in the transportation and industrial sectors financing and leasing options for equipment.

After announcing that it would continue to support Equipment Finance’s operations in the Czech Republic and Slovakia, Societe Generale’s shares saw a 2.35% increase to 25.75 euros, outperforming the best performers in the STOXX 600 (.STOXX) and topping France’s CAC 40 index (.FCHI).

“SocGen is an overcomplex business with limited synergies between the various business units. We view this development as a step in the right direction that will free up capital that SocGen can use elsewhere or return to shareholders,” Morningstar analyst Johann Scholtz said.