French banking giant Société Générale has agreed to sell its British and Swiss private banking divisions to Switzerland's Union Bancaire Privée (UBP) for €900 million, as part of a strategic move to streamline operations and boost capital.

The deal, announced on Monday, involves the sale of SG Kleinwort Hambros in the UK and Société Générale Private Banking Suisse. These units collectively manage approximately €25 billion in assets. The transaction is expected to be completed by the end of the first quarter of 2025.

This divestment aligns with Société Générale's chief executive officer Slawomir Krupa's strategy to focus on core businesses and improve overall performance. Krupa, who took the helm just over a year ago, has pledged to enhance profits and capital by reducing costs and shedding non-essential assets.

The sale is anticipated to boost Société Générale's core equity tier 1 (CET1) capital ratio by around 10 basis points. Following the transaction, the bank plans to concentrate on developing its private banking operations in France, Luxembourg, and Monaco.

In a separate deal, Société Générale also announced the sale of 70 per cent of its Madagascar subsidiary to BPCE's BRED Banque Populaire for an undisclosed sum. This move is expected to add a further 2 basis points to the bank's CET1 ratio.

UBP, one of Switzerland's leading private banks, views the acquisition as an opportunity to expand its overseas presence, particularly in the UK market where it has operated for nearly three decades. The deal will increase UBP's total assets under management, which stood at CHF150.8 billion at the end of June.

These strategic sales come at a crucial time for Société Générale, as the bank faces pressure to revive its stock price following a recent decline after cutting a key performance target for its French retail division.

---