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SocGen (SCGLY) Faces Difficulty in Offloading Securities Unit

Societe Generale SCGLY is finding it difficult to get hold of an appropriate buyer for its securities services unit. According to a Reuters report, citing sources close to the matter, potential bidders have been hesitant because of the price that France’s third-largest lender is seeking for the business.

Per media reports, SCGLY wants more than 1 billion euros ($1.1 billion) for the unit.

Since last year, SCGLY has been trying to offload Societe Generale Securities Services as part of its efforts to boost valuation by getting rid of poorly performing businesses.

According to one source, while State Street Corporation STT has been in talks to buy the securities unit, the discussions have been presently delayed.

Neither SocGen nor STT made any comments on the matter.

At the end of December 2023, Societe Generale Securities Services had 4.9 trillion euros in assets under custody, making it the second-biggest assets custodian in France.

While SCGLY is still open to a sale, provided it gets a correct price for the unit, offloading the securities services unit is no longer a priority for the bank because the unit provides a regular stream of liquidity that is needed by the other parts of the business.

Over the past six months, SCGLY shares have gained only 1.7% compared with the industry’s growth of 10.7%.


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Zacks Investment Research

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Currently, SocGen carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Divestitures by Other Finance Firms

Last month, U.S. bank Truist Financial TFC completed the divestiture of the remaining 80% stake in its insurance subsidiary — Truist Insurance Holdings ("TIH") — to Stone Point Capital and Clayton Dubilier & Rice.

Following the sale, TFC executed a balance sheet repositioning strategy, which is expected to help the company generate higher revenues this year than previously expected.

Chairman and CEO of TFC, Bill Rogers, said, “The sale of TIH significantly enhances Truist's financial profile and positions Truist to invest in and grow its core banking businesses.”

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