SocGen to buy key Commerzbank businesses

PARIS: French banking giant Societe Generaleon Tuesday said it has secured a deal, subject to regulatory clearance, with German bank Commerzbank to buy its key equity markets and commodities business.

“This acquisition would be transformational for our activities in Germany as it would enable Societe Generale to reach a new scale in the leading eurozone economy,” the French bank’s deputy CEO Severin Cabannes said in a statement.

The statement did not specify the value of the transaction.

It said the activities that would come under Societe Generale’s control are based in Frankfurt, London, Hong Kong, Paris, Luxembourg and Zurich.

Societe Generale said the move would “reinforce the bank’s global leadership in derivatives and investment solutions”.

It also said it would have a “pos

Investors cautiously welcomed the move, pulling Societe Generale’s share price up by 0.6 percent in early Tuesday trading. Within an hour, the bank’s stock

Commerzbank’s shares rose meanwhile by 0.7 percent.

statement that an agreement had been reached.

It said the transaction “would include transfer of trading books, client franchise, staff, and IT infrastructure”.

It also said that it would enable it to cut 200 million euros ($233 million) in costs by 2020.

The Frankfurt-based giant said it generated 381 million euros in gross revenue in 2017.

“We are simplifying our business, we are contributing to our costcutting targets, and we are freeing business with private and corporate clients,” Commerzbank’s CEO Martin Zielke said in a statement.

Commerzbank is 15.6 percent owned by the German state.

In 2016, it had announced a plan to cut costs by refocusing on its retail and commercial banking activities, adding 73,000 new customers in its private and small business arm and 1,000 new corporate clients.

The bank, which employs 49,000 people, posted a 9.2 billion euro turnover in 2017.