French bank Societe Generale said on Monday it planned to close much of its South African commercial banking operation and was in talks to sell local brokerage arm SG Securities, in line with global plans.
The restructuring will leave SG South Africa with around 90 staff — half its current payroll — once 75 staff are let go from the commercial banking arm and the 30-strong brokerage is sold.
SG South Africa Chief Executive Gerard Ferent said the restructure was part of the group’s global strategy to move away from niche brokerage operations, as in Asia and eastern Europe, and due to a highly competitive local commercial banking sector.
”We really have to adapt our business mix to the conditions of the market,” he told Reuters. ”We feel there is no point to go on fighting with South African banks, which are doing very well, and without a critical mass.”
The firm in South Africa would now focus on issuing warrants, providing custody services and giving access to SG’s global services including commodities, export, project and structured finance and equity capital markets.
It would also offer corporate finance and advisory services related to mergers and acquisitions, currently conducted by its SG Hambros division, which the company said would now be incorporated as a wholly-owned subsidiary of SG.
”As a result of this restructuring, the bank will cease to accept new commercial business related to currency dealing, money markets, commercial lending and trade services with immediate effect,” it said.
SG South Africa said it was in talks with interested buyers for SG Securities, but would not name them. – Reuters