For a few days now, the third largest French bank, Société Genérale (Socgen), which has lost about 20% on the stock market since the beginning of the year, especially after the launch of the profit warning in January, is proving to be one of the best stocks on the Paris market .
What gives SocGen a sprint on the Stock Exchange are mainly the rumors, neither confirmed nor denied by the bank's top management, according to which – as Bloomberg reported yesterday – Socgen is seriously considering putting a hand on its presence in asset management where it controls a major company such as Lyxor which manages assets for 151 billion euros, half represented by ETFs (passive funds).
However, the competitive pressure on asset management has been very strong since the leaders of the sector – BlackRock and Vanguard – have cut commissions to customers, triggering a race to the bottom between managers.
This is why SocGen is allegedly thinking of selling or pairing Lyxor by entering the ongoing consolidation process as a protagonist, as Deutsche Bank and Ubs had also thought of doing in recent months, which in effect started talks for the wedding, which however did not have success.
A definitive decision on Lyxor, the third largest French bank, has not yet been taken, but the line presented by the CEO, Frederic Oudea, after the profit warning at the beginning of the year is clear: cut costs and sell non-strategic assets to regain competitiveness and halt the decline in profits and margins. Will Lyxor pay for it? It will soon be understood, but in the meantime the Stock Exchange takes note and rewards the SocGen share.
