Société Générale has announced it will proceed with its planned merger with subsidiary Crédit du Nord. The move will see it close 600 branches by the end of 2025, leaving the group with a retail network of 1,500 branches from 2,100 today.
The group is targeting cost savings of €450m by 2025 through the merger, such as via branch closures, as well as through the use of a single IT system and consolidating group functions.
SocGen has also announced it is aiming to build up its digital banking platform Boursarama, with a push to grow increase current customer base of 2.5 million to 4.5 million by 2025.
Group CEO Frédéric Oudéa cited the Covid-19 pandemic and how it has accelerated changes in consumer behaviour as a key factor behind these initiatives.
The announcement comes at the end of a challenging year for the bank. In the second quarter of 2020 it reported a €1.26bn loss, putting the group under pressure to make structural changes particularly within its equity trading division, which was hit hard by Covid-19, as well as in retail banking.
Commenting on the changes within its retail banking arm, Mr Oudéa said: “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.”
Profitability has been an issue for the group in recent years. According to The Banker Database, return on equity fell substantially between 2018 and 2019. The group’s annual pre-tax profits were largely flat between 2015 and 2017, and slumped between 2018 and 2019 following an increase between 2017 and 2018.
