Credit Agricole Said to Lead Bidding for SocGen’s Hanseatic Bank

A logo on the exterior of the Credit Agricole SA bank headquarters in Montrouge, France, on Wednesday, Aug. 2, 2023. Credit Agricole reports earnings on August 4. Photographer: Nathan Laine/Bloomberg (Nathan Laine/Bloomberg)

(Bloomberg) -- Credit Agricole SA is in advanced talks on a potential acquisition of Societe Generale SA’s German consumer-finance business Hanseatic Bank, according to people familiar with the matter. 

Paris-listed Credit Agricole has emerged as the most likely buyer after some other suitors fell away, the people said. Hanseatic Bank could be valued at more than €600 million ($650 million) in a deal, said the people, who asked not to be identified as the information is private. 

Credit Agricole is currently negotiating terms of a potential deal and there’s no certainty it will reach an agreement, the people said. Societe Generale could decide to keep the business if it can’t fetch a high enough price, according to the people.

Representatives for Credit Agricole and Societe Generale declined to comment.

SocGen has been exploring a sale of Hamburg-based Hanseatic Bank, which it owns in conjunction with German retailer Otto Group, Bloomberg News reported in November. A successful divestment would be a boon for SocGen Chief Executive Officer Slawomir Krupa, who has been looking to boost the French lender’s profitability and capital buffers through a disposal program.

Krupa, who took over the top job in May 2023, has had a rocky first year after unveiling a strategic plan that prioritized cost-cutting over growth. Shares of SocGen have been little changed in the past year, underperforming the 11% gain in BNP Paribas SA over the period and well behind Deutsche Bank AG and UniCredit SpA.

SocGen agreed in April to sell its equipment-finance unit to rival Groupe BPCE for €1.1 billion and said it will divest the bulk of its Moroccan business to Saham Group in a €745 million deal. It has been in talks with State Street Corp. to potentially offload its custody business, Bloomberg News reported the same month.

Hanseatic Bank was created by the late German entrepreneur Werner Otto as a way to allow customers of his retail empire to finance their purchases. In 2005, SocGen bought a 75% stake from Otto Group, which is also looking to exit the business.

The German lender offers consumer credit, deposit and savings as well as insurance and factoring. It had more than 550 employees and €431 million in total equity as of the end of last year. The unit has been profitable with a return on equity of 15%, a person with knowledge of the matter said earlier.

Credit Agricole has been one of Europe’s most acquisitive banks in recent years. Last year, it agreed to buy a majority stake in Belgian asset and wealth manager Degroof Petercam.

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