France’s Societe Generale to divest stake in asset management arm Lyxor: sources

According to two sources familiar with the matter at hand, Societe Generale is gearing up to launch the sale of its asset management arm Lyxor with the French lender aiming to shore up its finances following two consecutive quarterly losses.

To this end, Societe Generale, France’s third-biggest bank, has hired Citigroup to oversee the sale, which is likely to kick off during the fourth quarter, said sources speaking on the condition of anonymity.

Both, Societe Generale and Citi, declined comment.

As of the end of June 2020, Lyxor had around $156 billion (132 billion euros) of assets under its management, with exchanged-traded funds (ETF) representing nearly 50% of its operations.

Societe Generale is Europe’s third largest ETF provider.

According to a source, the business could be valued at around $1 billion.

“It’s all been prepared and is ready to start, but the board has yet to sign it off,” said the source.

Lyxor posted 21.6% decline in revenue to 40 million euros in the second quarter because of COVID-19 induced market conditions.

According to another source, Societe Generale’s CEO Frederic Oudea is trying to strengthen the bank’s capital ratio and could potentially explore strategic options for its UK wealth management unit.

The bank said it would sell or close business lines that have not reached critical mass or do not generate synergies.

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