Societe Generale (SocGen) and Credit du Nord, both based in Paris, have approved a plan to merge their retail banking operations, the banks said in a Monday (Dec. 7) press release. In addition, SocGen said, the plan is to beef up Boursorama, a retail digital banking operation catering to individuals.
The release said that, “from a financial perspective, the merger” will generate cost savings, including from the use of a single IT system and “the consolidation of Group functions.”
The merger “will form a new entity at the service of nearly 10 million customers” — ranging from corporations to individuals. “The goal is to be one of the leaders in terms of core customer satisfaction with our core client base and to establish a banking model with strengthened profitability,” according to the release.
SocGen is already one of France’s largest banks.
The companies said they have “decided to bring Boursorama to maturity in terms of the number of customers, with the goal of reaching 4.5 million customers in 2025 and achieving high profitability.”
Boursorama has more than 2.5 million customers. The press release said the online bank ranks highly for customer satisfaction, and has gained 2 million customers in five years. In addition, “Boursorama intends to continue its investments aimed at onboarding new customers over the next few years and has now set itself the goal of reaching more than 4 million customers in 2023 and 4.5 million in 2025.”
As with many retail industries, COVID-19 has battered banks. In fact, brick-and-mortar retail banking was already on the decline before the pandemic added health and safety concerns to the mix. Fully digital neobanks with no branch locations were already on the rise.
For its part, SocGen moved to acquire neobank Shine over the summer.
“Shine’s model appealed to us because it reinforces our relational promise to offer clients the best of mix of people and digital technology, ” Marie-Christine Ducholet, director of SocGen retail banking in France, said in the announcement.