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Societe Generale (SCGLY) in Restructuring Mode to Save Costs
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Amid the coronavirus-induced economic slowdown, several firms are dodging toward cost cutting to make retail banking profitable with restructuring moves. Among other European banks, Societe Generale Group (SCGLY - Free Report) has emerged with the plan of reducing costs by about 450 million euros ($545 million) annually.
The plan relies on the company’s move of combining French retail operations with its Credit du Nord subsidiary to boost profitability by cutting costs.
After-Effects of the Deal
Post-merger, the number of branches in the merged division will likely be 1,500 by 2025, down by 600. Also, the integration costs are expected to be about 800 million euros, mostly to be recorded next year. Notably, no layoffs are anticipated due to the combining entity.
The combined French retail unit, including companies and individual savers, will hold about 10 million customers.
Hitting hard at its capital market profits due to the pandemic, the bank recorded the worst quarterly losses in 12 years. However, after returning to profits, Societe Generale recently announced the plan of slashing 640 jobs, mainly at its investment bank.
The combined retail business is likely to reduce costs by more than 350 million euros by 2024 and 450 million euros by 2025 as compared with 2019.
Other Developments
Societe Generale seeks to increase the client base to 4.5 million by 2025 from the existing 2.5 million customers at its online banking unit, Boursorama. Per the bank figures, acquiring new clients will lead to a cumulative loss of 230 million euros and thereafter, yielding profits in 2024.
Conclusion
Amid the pandemic-induced economic slowdown, several financial firms are undertaking initiatives to focus on core businesses, reduce costs and revive profitability. Therefore, these banks are adhering to restructuring with job cuts, branch closures and digitization.
Among others, major global banks — Wells Fargo (WFC - Free Report) , HSBC (HSBC - Free Report) and Citigroup (C - Free Report) — have moved on with their plans of cost reduction through layoffs this year.
In the past six months, shares of Societe Generale have appreciated 16.6% compared with 18.5% growth registered by the industry.
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Societe Generale (SCGLY) in Restructuring Mode to Save Costs
Amid the coronavirus-induced economic slowdown, several firms are dodging toward cost cutting to make retail banking profitable with restructuring moves. Among other European banks, Societe Generale Group (SCGLY - Free Report) has emerged with the plan of reducing costs by about 450 million euros ($545 million) annually.
The plan relies on the company’s move of combining French retail operations with its Credit du Nord subsidiary to boost profitability by cutting costs.
After-Effects of the Deal
Post-merger, the number of branches in the merged division will likely be 1,500 by 2025, down by 600. Also, the integration costs are expected to be about 800 million euros, mostly to be recorded next year. Notably, no layoffs are anticipated due to the combining entity.
The combined French retail unit, including companies and individual savers, will hold about 10 million customers.
Hitting hard at its capital market profits due to the pandemic, the bank recorded the worst quarterly losses in 12 years. However, after returning to profits, Societe Generale recently announced the plan of slashing 640 jobs, mainly at its investment bank.
The combined retail business is likely to reduce costs by more than 350 million euros by 2024 and 450 million euros by 2025 as compared with 2019.
Other Developments
Societe Generale seeks to increase the client base to 4.5 million by 2025 from the existing 2.5 million customers at its online banking unit, Boursorama. Per the bank figures, acquiring new clients will lead to a cumulative loss of 230 million euros and thereafter, yielding profits in 2024.
Conclusion
Amid the pandemic-induced economic slowdown, several financial firms are undertaking initiatives to focus on core businesses, reduce costs and revive profitability. Therefore, these banks are adhering to restructuring with job cuts, branch closures and digitization.
Among others, major global banks — Wells Fargo (WFC - Free Report) , HSBC (HSBC - Free Report) and Citigroup (C - Free Report) — have moved on with their plans of cost reduction through layoffs this year.
In the past six months, shares of Societe Generale have appreciated 16.6% compared with 18.5% growth registered by the industry.
Currently, Societe Generale carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>