Groupe BPCE acquires Societe Generale Equipment Finance

Groupe BPCE has entered an agreement with fellow French bank Societe Generale to acquire Societe Generale Equipment Finance, as BPCE looks to expand outside of France. 

BPCE agreed to pay 1.1 billion euros ($1.2 billion) for the equipment finance group. 

“Groupe BPCE, the second-largest banking group in France, is already active in equipment leasing through the BPCE Lease subsidiary,” Nicolas Namias, chief executive of BPCE, said in a bank release. “Looking ahead to the group’s new strategic plan, this transaction underscores our growth ambitions in Europe, intensifies our revenue diversification and changes our dimensions in this business.” 

Societe Generale (SGEF) began simplifying its portfolio in September 2023, the company previously said. SGEF has $16.5 billion in outstanding global equipment loans and estimated regulatory risk-weighted assets of $8.6 billion, according to an S&P Global research note. 

While the transaction excludes SGEF’s operations in the Czech Republic and Slovakia, the company’s operations in 33 other countries create an international footprint that aligns with BPCE’s growth strategy, Odile de Saivre, chief executive of SGEF, said in Societe Generale’s news release. 

“Within Societe Generale, SGEF has developed its international activities to achieve a unique geographical coverage,” he said. “With the proposed Groupe BPCE project, I am delighted to open a new chapter firmly oriented toward growth, thanks to the strong alignment of our activities.” 

BPCE’s Namias called out the talent of the SGEF management team, especially CEO de Saivre, as a key component of BPCE’s growth plans, in the BPCE release.

Societe Generale Equipment Finance outlook

While the transaction needs regulatory approval and faces some risk in the current high-interest rate environment, the acquisition would make BPCE the European leader of equipment financing solutions in terms of outstandings, according to the BPCE release. 

The deal is expected to close in the first quarter of 2025, according to the S&P Global research note. 

“The transaction will reduce BPCE’s common equity Tier 1 ratio by 40 basis points,” according to the research note. “That said, the deal will shrink BPCE’s buffer, leaving it with less capacity to absorb any additional pressure on asset quality, asset growth, earnings and, more generally, one-off events that could ultimately erode its strong capital.” 

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Editor’s note: All amounts have been converted to U.S. dollars.