Finance

BRVM: Société Générale CI sets records but not many retail investors are benefiting

Saturday, 25 June 2022 05:58
BRVM: Société Générale CI sets records but not many retail investors are benefiting

(Ecofin Agency) - About six months to the end of the finance year, Societe Generale Côte d'Ivoire’s share is on an uptrend with solid stock performance. However, the performance will not benefit many local retail investors. 

Although its share price fell by 4.6% on Thursday 23 June, Societe Generale Côte d'Ivoire is currently the leading listed bank on the Abidjan Regional Securities Exchange (BRVM). The company has the second-largest market capitalization in the regional financial market with a valuation estimated at XOF 460.4 billion ($738 million).

From January 2022 to date, its share has risen by about 41.6%, according to data compiled by Ecofin Agency. Should that performance continue till the end of the year, it would be its best stock performance since 2012 and the second-best since 2003, according to Capital IQ. 

Also, the bank currently keeps a generous dividend policy. For the 2021 fiscal year, it distributed a dividend of XOF1,004.9 per share, which is the highest dividend distributed by any BRVM-listed bank.  The dividend represents 46.1% of the earnings per share estimated at XOF2167.6. It is also the highest dividend paid to investors since 2017.  

The bank can continue to count on the prudential management, which allowed it to increase its excess reserves. This is a significant advantage amid the imported inflation and the Russia-Ukraine conflicts, which adds to the problems already caused by the coronavirus pandemic. 

Unfortunately, not many WAEMU retail investors will benefit from those good performances as 73.25% of the bank's capital is owned by France-based Société Générale. Various shareholders, including institutional investors and possibly individuals, own 18.09% of the capital. Out of the estimated XOF31.25 billion dividend distributed, those minority shareholders possibly received XOF5.6 billion. 

Let’s note nevertheless that since each of its shares cost XOF15,000, it is not that attractive for individual investors. In addition, its 6.8% dividend yield is lower than that of other banks in the market. For instance, Ecobank Côte d'Ivoire has the highest dividend yield in the BRVM banking segment (9.34%).  Overall, with a price-to-earnings ratio of 6.8, it still has much to give investors and needs to be watched.



 
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