French banking giant Societe Generale has agreed to sell its majority stakes in Bulgarian and Albanian banking operations to Hungary’s OTP Bank.

As part of the deal, SocGen will sell a 99.74% stake in Bulgarian arm Societe Generale Expressbank  (SGEB) and a 88.89% stake in Banka Societe Generale Albania (SGAL) to the Hungarian lender.

Societe Generale Expressbank, which has been active in the retail as well as corporate segment, has a market share of approximately 6.7%.

SGAL is the 5th largest bank on the Albanian banking market with a market share of approximately 6%.

The decision to sell these businesses is to be part of the French bank’s strategy to divest operations that either lack critical size or potential for synergies within the group.

The deals are expected to have a positive impact on the Societe Generale’s CET1 ratio of approximately 12 basis points and slash the bank’s risk weighted assets by about €3bn.

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Societe Generale Group deputy-CEO and in-charge of international retail banking activities, financial services and insurance Philippe Heim said: “The sale of Societe Generale Expressbank in Bulgaria and Societe Generale Albania is an important milestone in the implementation of Societe Generale’s Strategic and Financial plan “Transform to Grow”, whose primary objectives are to focus and develop its presence on markets and activities with a critical size and the potential for generating synergies with other Group businesses.

“International Retail Banking activities are a profitable growth engine for Societe Generale Group and we are committed to pursue their development.”

Furthermore, SocGen and OTP Bank are in talks to sign a services agreement which will include the provision of mutual services in numerous fields such as investment banking, capital markets, financing and global transaction banking in Albania, Bulgaria, Croatia and Hungary.

Subject to approvals from the relevant banking and antitrust authorities, the acquisitions are expected to complete in the fourth quarter of 2018.