Societe Generale Said To Revive Sale Of U.K. Private Bank Unit

(Bloomberg) -- Societe Generale SA is reviving a potential sale of its private UK bank Kleinwort Hambros, according to people familiar with the matter, a move that would allow the French lender to free up capital.

The French bank is working with advisers to explore interest in the unit, said the people, who asked not to be identified discussing private matters. There’s no certainty the efforts will lead to a transaction, they said. 

SocGen is also evaluating the possible disposal of its Swiss private banking unit, according to the people, as new Chief Executive Officer Slawomir Krupa looks to boost the bank’s valuation by offloading non-core assets. 

A spokesperson for SocGen declined to comment.

Hambros, which has offered private banking to London’s wealthy for almost two centuries, was acquired by SocGen in 1998. It’s grown through subsequent deals including tie-ups with Kleinwort Benson and Barings Asset Management’s private client unit, and now manages about £12 billion ($15.1 billion). 

SocGen tried to sell the business in 2019 but couldn’t find a suitable buyer. Some interested parties were turned off by a lack of scale and ongoing restructuring costs at the time, people familiar with the matter said at the time.  

In Switzerland, SocGen caters to local clients and those in Luxembourg and Monaco, with services ranging from jet and yacht financing to wealth planning. The country’s vast private banking sector has been consolidating gradually over the past decade, a process that’s been accelerated by the shock rescue of Credit Suisse by UBS Group AG in March. That deal sent private bankers fleeing to rivals such as Lombard Odier and Julius Baer Group Ltd. 

Internationally, SocGen says it manages about €143 billion ($154 billion) of private banking assets across 15 countries. 

Major Overhaul

Selling the UK or Swiss businesses would support new boss Krupa’s overhaul of the French lender. As well as lowering the bank’s revenue and profitability targets, he has suggested he would exit non-core businesses that don’t pay their way. 

The bank has been working with external advisers on the disposal of its custodian unit, known as SGSS, and the lender’s equipment finance business, or SGEF, which caters to clients in the transportation, industrial equipment and renewables sectors.  

SocGen has agreed to exit various African units and disclosed on Thursday it would divest its shares in its Burkina Faso and Mozambique units to Vista Group. Krupa is also considering selling consumer-finance assets outside of France, Bloomberg News has reported. 

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