Bank: Société Générale Merges with Crédit du Nord, 600 Branches Closed by 2025

Finance
The headquarters of Société Générale in La Défense.

RESTRUCTURING: The Société Générale bank group assures this Monday that there will be no forced departures

With the economic crisis resulting from the coronavirus pandemic, the French banking landscape is restructuring. The banking group Société Générale formalised on Monday the plan to merge its two retail networks in France Societe Generale and Crédit du Nord. This project will involve the closure of 600 branches.

After a weekend of consultation with the boards of directors concerned, the group with the red and black logo decided that the two networks would become one from the first half of 2023, he said. announced in a press release. This decision follows a study on the subject launched in mid-September.

Natural departures and worried unions

The group intends to preserve the same territorial footprint while reducing the number of branches – in the same city, there are indeed often branches of the two brands close to each other. It will thus drop from around 2,100 branches at the end of 2020 to around 1,500 at the end of 2025.

In terms of jobs, “there will be no layoffs, no forced departure”, assured AFP Sébastien Proto, deputy general manager of the group, believing that the natural departures in the coming years will allow the project to be completed. while continuing to recruit. The unions, for their part, fear many job cuts, because of the duplication between the two structures. The Credit du Nord CFDT estimated that the two banks could lose at least “between 3,000 and 5,000 jobs”.

The cost of Covid-19

“Our objective is to anticipate changes in customer behaviour in the coming years in an environment for retail banks that is changing very quickly and very deeply,” emphasizes Sébastien Proto. The group anticipates an acceleration of this development at the end of the health crisis, with the increased use of online services and even higher expectations of responsiveness and immediacy in banking services.

The banking group suffered a loss of more than one billion euros in the first half of the year under the effect of the Covid-19 crisis, before partially recovering in the third quarter. In this context, he announced during the summer the appointment of a new management team under the leadership of General Manager Frédéric Oudéa, with a view to preparing his future strategic plan, which should in particular reduce costs.

A 700 million euro project

Until now, the group’s retail banking activities have been organized around three brands with a large degree of autonomy: the Société Générale and Crédit du Nord networks, with physical branches, and the online banking Boursorama.

The merger of the first two should allow a net reduction in the cost base of the future set of more than 350 million euros in 2024 and about 450 million in 2025 compared to 2019. The bill to be paid to complete the project is estimated between 700 and 800 million euros, which will be paid next year for the most part.

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