Société Générale invests €4billion to boost development in Africa
In recent years, the group has seen its influence wane across some of its traditional markets.French banking group Société Générale is to allocate €4billion of additional capital to its African operations by 2016.
According to newspaper Les Echos, this investment comes at a time when the group is seeing its influence wane across some of its traditional markets as it competes with local giants, particularly in Côte d'Ivoire, Senegal and Cameroon.
"The environment is very competitive, Moroccan and pan-African banks are very aggressive and if we are to succeed, we need to accelerate the professionalisation of our subsidiaries," said the bank's regional director Alexandre Maymat.
The group plans to focus on the business market - which accounts for 55 per cent to 90 per cent of its revenues depending on the country - and is looking to provide a pan-African and "sophisticated" offering to major international and local companies.
To achieve this objective, it will establish a regional trading room in Abidjan to expand product coverage and equip its subsidiaries for cash management and factoring deals.
The group hopes to reach a seven per cent annual average growth and a return on equity of above 15 per cent in Africa.
Banks can expect a 15 to 20 per cent revenue growth in sub-Saharan Africa, according to a recent study from consulting firm Bain & Company.
It believes that countries like South Africa, Nigeria, Angola, Kenya and Ghana are fast becoming a new "El Dorado".
The region has a growth rate of eight per cent and only between 20 and 40 per cent of the population has access to banking services depending on the country. This shows there is a wide margin of progression, the study states.