Posted Nov 22, 2022 8:44 am
PARIS (Agefi-Dow Jones) – Société Générale announced Tuesday that it has reached an agreement with asset management and research specialist AllianceBernstein to create a joint venture that will combine their activities of “cash” actions and equity research.
Societe Generale will initially own 51% of this joint venture, which will “provide investors with investment advice, insights into equity markets in the US, Europe and Asia Pacific, as well as unparalleled access to liquidity and the latest execution technology,” the French bank said in a statement. After five years, Societe Generale will have the possibility of increasing the capital of the joint venture to 100%, which will be based in London and will be “managed in the form of a long-term partnership between its two shareholders under the name of Bernstein”.
The financial terms of the deal were not disclosed.
Upon completion of the transaction, expected before the end of 2023, “Robert van Bruegge, current CEO of Bernstein Research Services, will become CEO of the new entity for an initial period of five years,” Societe Generale said. Stéphane Loiseau, Director of the Bank’s Cash Equity Activity, will also be appointed Deputy General Manager of the joint venture.
Societe Generale explained that “this project to create a leading equity franchise will be cumulative from 2025” for the group and will lead to an increase in profitability (ROTE) estimated between 15 and 20 basis points. The bank specified that “the estimated impact on the CET1 ratio, already factored into the group’s 2025 target presented in the second quarter 2022 financial results, will be limited to approximately 10 basis points upon closing of the operation.” .
“This new partnership project is fully in line with Societe Generale’s investment banking strategy. It will promote diversification of activities, both geographically and in terms of the nature of the income generated, the latter consisting of low-risk commissions. The combination of these research and execution activities will strengthen the relationship with clients, It expands franchising and gains market share,” Societe Generale emphasized.
The project has been approved by the boards of directors of Societe Generale and AllianceBernstein and is subject to consultation with the representative bodies of employees and obtaining the required regulatory authorizations, Societe Generale said.
– Valerie Fink, Agee Dow Jones; +33 (0) 1 41 27 48 25; email@example.com ed: ACD
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November 22, 2022 02:44 a.m. ET (07:44 GMT)