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Société Générale CI Tops West African Banks by Market Value

Monday, 17 June 2024 12:23
Société Générale CI Tops West African Banks by Market Value

(Ecofin Agency) - Société Générale Côte d'Ivoire, the Ivorian branch of the French banking group Société Générale, has become the highest-valued bank in the Economic Community of West African States (ECOWAS). Listed on the Abidjan Regional Stock Exchange, its market valuation stands at CFA638.1 billion ($1.04 billion). This makes it one of only 14 African banks with a market value exceeding $1 billion.

By mid-2024, the bank's stock value had increased by 27.8% on the WAEMU financial market. This marks its third-best performance since 2015, according to data from Ecofin Agency. Among 18 major African banks, Société Générale Côte d'Ivoire has shown the third-best performance over the past 30 days, with a 13.4% increase.

Strong First-Quarter Performance

The bank’s growth aligns with robust first-quarter 2024 results. In unaudited accounts, it reported its highest net banking income and net profit since 2015. Net profit grew by 58.4% in the first three months of 2024, the strongest growth for the period. Analysts from Investing.com suggest the market value could still rise by 5.8%.

However, part of Société Générale Côte d'Ivoire’s top position among ECOWAS banks is due to the devaluation of the Nigerian naira. This devaluation significantly reduced the dollar value of major Nigerian banks like Access Holding, United Bank for Africa, and Guaranty Trust Holding, despite their record performances in local currency in 2023.

This is the first time a bank operating solely in a Francophone sub-Saharan African country has surpassed $1 billion in market value. Société Générale CI’s stock, priced at an average of CFA18,300, has seen nearly CFA3 billion in transactions since the start of 2024, over half of the total volume for 2023, according to African Markets data.

There is ongoing speculation about whether the Ivorian branch might be sold, similar to Société Générale's largest African branch in Morocco. If so, the French banking group is in a strong position to leverage significant value.

Beyond its billion-dollar market value, Société Générale Côte d'Ivoire has a low leverage ratio, with assets only 8.6 times its equity as of Q1 2024. This indicates a focus on shareholder value creation through substantial liquidity reserves.

Despite its focus on shareholder wealth, return on equity has declined from 35.6% in 2014 to 26% based on recent four-quarter financial data.

Société Générale Côte d'Ivoire remains under close watch due to its market value, growth potential, dominant market position, and the risk of sale for compliance reasons. Major investors include Russel Investment Management, an American asset manager based in Seattle, and Allianz’s Francophone African subsidiaries. Société Générale retains a 73% stake, with the public holding 18.1%.





 
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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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