Societe Generale – Crédit du Nord: four key figures on a major restructuring

Posted on Dec. 2020 at 11:53

After validation of the project this weekend by the boards of directors of the two banks, Societe Generale confirmed this Monday morning the implementation of the merger of the networks with its subsidiary Crédit du Nord. The project, called VISION 2025, should enable the group to rationalize its retail banking activity and increase its profitability.

Four-figure review of the consequences of this large-scale project in the French banking sector, which should be operational from the first half of 2023.

600 branches closed

The scope of the work is considerable. By the end of 2025, the number of Societe Generale and Crédit du Nord branches should drop from 2,100, to just 1,500. That is to say a reduction of more than a quarter in the number of sites (these are full-service agencies). Despite this drastic decrease, the group ensures that it will preserve ” the same territorial footprint […] thanks to the great geographical proximity of the branches of the two brands in the same city “.

Two agencies side by side could thus merge into one. It remains to be seen with which logo on the front. Within the Crédit du Nord group, eight regional bank brands coexist (Courtois, Tarneaud, Klob, etc.). For now, the branding strategy for the new set remains to be determined. The work should continue in the coming months.

Between 2015 and 2020, during the last strategic plan, Societe Generale had already reduced the number of branches by 20%, with 500 fewer sites. Its new program is a priori the most ambitious in the French banking sector.

3,000 to 5,000 positions in danger, according to the CFDT

Societe Generale and Crédit du Nord retail banking activities together employ nearly 29,000 people. This figure will drop after the merger. The group has, for the moment, given no indication on the number of posts which could be eliminated, while the project has yet to be submitted for consultation with the social partners.

An average agency has around 6 employees. Before the presentation on Monday, the CFDT anticipated 3,000 to 5,000 job cuts with the merger.

The group is committed that there will be no layoffs, no forced departure. While around 1,500 people retire each year in the two brands, “ natural departures will largely make it possible to manage this merger project, while continuing to recruit », Declared Sébastien Proto, deputy general manager of Societe Generale in charge of retail banking to AFP.

450 million euros in savings

The purpose of the merger between the two brands is in particular to increase the profitability of retail banking, weighed down for years by the low interest rate environment and strong competition between networks in France, amplified by the emergence of neobanks.

Societe Generale has made its accounts: combining the two entities should reduce the cost base by 350 million euros in 2024, and 450 million euros in 2025. The migration to a single common IT system, the shutdowns of Most of these savings will be made up of agencies and job cuts. The costs of the project should amount to between 700 and 800 million, which will be provisioned in the accounts next year.

10 million customers

The new set should account for around 10 million customers, including nine million individuals. It will remain far behind the number one market Crédit Agricole and its 24 million customers, or Caisse d’Epargne and its 19 million customers (and 31 million with the Banque Populaire banks, which are also part of the BPCE group).

Nevertheless, the Societe Generale galaxy should continue to grow thanks to the contribution of Boursorama. The group’s online banking subsidiary intends to accelerate its conquest to reach 4.5 million customers by 2025, against 2.5 million currently. For the year 2020 alone, and despite the pandemic, the brand claims to have recruited 550,000 customers.

This rapid development will of course have a cost, but Societe Generale assures that its subsidiary will be able to be profitable from 2024, with a net profit of 100 million euros, brought to 200 million from 2025.

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