SocGen CEO sees organic African growth in ‘uncertain climate’

French lender has been leveraging a three-year-old partnership with Absa Group to extend its reach on the continent.
Image: Bloomberg

Societe Generale SA chief executive officer Frederic Oudea said the French lender wants to grow organically in Africa amid uncertainties such as the post-pandemic recovery and insecurity.

Oudea, who will be bringing an end to his 15-year reign at the bank next year, told journalists in the Ivorian commercial hub, Abidjan, Friday that he sees the African business, which makes up about 8% of revenue, expanding gradually.

That seemingly rules out any interest in picking up the two West African assets French rival BNP Paribas is seeking to exit.

“Geographic expansion is not a priority,” said Oudea, stating that the lender prefers to consolidate its presence in markets where it’s a leader or has the potential to become one.

“The priority is to continue a very dynamic organic growth in a very uncertain climate from the Covid-19 crisis and new geopolitical challenges.”

SocGen’s Ivorian unit, which invited the Paris-based executive and other top officials to mark its 60th year in operation, has opened a department dedicated to financing the green economy to contribute to the bank’s global push to raise 300 billion euros ($317 billion) for such deals over the next few years, Oudea said.

SocGen, which has a presence in 19 African countries, has also been leveraging a three-year-old partnership with Johannesburg-based Absa Group to extend its reach on the continent.

“Covid and in part the South African situation have slightly impacted that collaboration’s dynamism in recent months,” said Laurent Goutard, who heads international banking for several regions including Africa. “We are working to ensure that that partnership continues to grow.”

Mozambique LNG project

A fresh wave of attacks by an Islamic State affiliate in northern Mozambique has also threatened to further delay TotalEnergies SE’s $20 billion liquefied natural gas project.

The project, for which SocGen is the lead financial adviser, will likely be suspended until 2023, chief executive officer Patrick Pouyanne said in April. A key requirement for resumption will be for displaced people to return to their homes. The United Nations estimates that at least 784 000 people are internally displaced.

The bank remains committed to that southern African market, even as it awaits guidance from Total and the Mozambican authorities on the project’s future, said Georges Wega, deputy head for international banking for Africa and other regions.

“We have an operation that’s profitable in Mozambique independently of this project,” Wega said. “This project doesn’t make us in Mozambique, we are a bank that is working, prospering and supporting our clients.”

© 2022 Bloomberg

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