(Agence Ecofin) – The devaluation of the naira created the opportunity for this ranking, but it is the first time that a listed bank from a French-speaking sub-Saharan African country has reached this level of stock market value.
The Ivory Coast subsidiary of the French banking group Société Générale is currently the leading bank in ECOWAS in terms of stock market value. On the Abidjan Regional Stock Exchange where it is listed, its market valuation is 638.1 billion FCFA ($1.04 billion). This level allows it to be among the 14 banks listed on African markets with a market value exceeding one billion dollars.
By mid-2024, the value of its share has already increased by 27.8% on the UEMOA financial market. This is its third best performance since 2015, according to data consulted by the Ecofin Agency.
Among 18 African systemic banks (having a strong market value or a large presence on the continent), Société Générale Côte d’Ivoire displays the third best performance over the last 30 days (+13.4%).
A stock market value that reflects the performance of quarter 1
This growth comes in the wake of announcements of solid performance during the first quarter of 2024. The bank presented (in unaudited accounts) figures which reflect its best net banking income (equivalent to turnover in banks) and its best net profit since 2015. In addition, the growth in net profit for the three months ending at the end of March 2024 (+58.4%) is the most vigorous of the period under review. Also, a margin of progression of 5.8% is still possible on its market value, according to analysts from the Investing.com platform.
However, it should be noted that this positioning of Société Générale Côte d’Ivoire among the most valued banks in ECOWAS is partly due to the devaluation of the naira. This loss of monetary value has significantly reduced the weight in US dollars of large Nigerian banking groups such as Access Holding, United Bank for Africa, and Guaranty Trust Holding, which nevertheless achieved record performances in 2023 in their national currencies.
This is the first time that a bank active in a single country in French-speaking sub-Saharan Africa has exceeded a billion dollars in market value. There is great momentum around Société Générale CI shares, which, although quite expensive (18,300 FCFA on average), have already been the subject of nearly 3 billion FCFA in transactions since the start of the year. year 2024. This is more than half of the volume of transactions recorded throughout 2023 (5.77 billion FCFA), according to data from the African Markets platform.
These performances are observed while there is still doubt as to whether the Ivorian subsidiary of the Société Générale group will also be sold, as was that of Morocco, the largest in Africa. If this is the case, the French banking group is in a strong position to extract great value from it.
Beyond the market value reaching $1 billion, SGB CI has a low level of leverage, with assets representing only 8.6 times equity according to data from the first quarter of 2024. This means that the bank is mainly geared towards creating value for its shareholders, thanks to the significant cash reserves it has built up.
Tight discussions in perspective, in the event of a proposed sale by the parent company
However, although the majority of operations are focused on creating wealth for shareholders, the return on equity has continued to decline since 2014, when it was 35.6%. Based on financial data from the last four quarters, this return is now only 26%.
Societe Generale is thus in the spotlight as one of the most interesting banks to follow due to its stock market value, its growth potential, its dominant position on a market whose growth forecasts are very positive, but also because of the risk of a sale by its parent company for compliance reasons. The dynamics of investors must be followed.
According to information from September 2023, the major institutional investor in the bank’s capital is Russell Investment Management, an American asset manager based in Seattle. However, the Société Générale group remains by far the majority shareholder with a 73% stake in its subsidiary, while other significant investors include subsidiaries in French-speaking Africa of the Allianz insurance group.
The BRVM public holds 18.1% of the shares.
