Societe Generale Group SCGLY is preparing to divest Lyxor, its asset management arm, with a view to manage finances after incurring losses in the two last quarters. The news was reported by Reuters.
As of Jun 30, 2020, Lyxor had nearly €132 billion of assets under management and is the third largest provider of exchange-traded funds, with the investment product representing almost half of its business.
The French lender has given Citigroup C the responsibility to supervise the sale. Also, the article reported that the company expects to sell Lyxor in the fourth quarter, which can be valued at about $1 billion, per the sources.
With little time left for the fourth quarter, interested parties have been informed about the sale. The sources also told Reuters that Societe Generale is targeting bidders from Europe and United States, including asset managers like Amundi and Deutsche Bank’s DB DWS.
"It's all been prepared and is ready to start, but the board has yet to sign it off," the source said Reuters.
Also, the company is making efforts to bolster its capital ratio and undertake strategic options for its U.K. wealth management unit, Kleinwort Hambros.
The move comes after the company reported losses for two consecutive quarters. In first-quarter 2020, it reported a net loss of €326 million, whereas in the second quarter, net loss was €1.26 million. The performance was majorly marred by the coronavirus outbreak.
Shares of the company have gained 2.1% over the past six months compared with 23.8% growth recorded by the industry it belongs to.
Societe Generale currently carries a Zacks Rank #4 (Sell).
A better-ranked stock from the same space is Credit Suisse Group CS, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past 30 days, the Zacks Consensus Estimate for the company has increased 2.1% for the current year. The company’s share price has jumped nearly 58.7% in the past six months.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Citigroup Inc. (C): Free Stock Analysis Report
Credit Suisse Group (CS): Free Stock Analysis Report
Deutsche Bank Aktiengesellschaft (DB): Free Stock Analysis Report
Societe Generale Group (SCGLY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.