SocGen is buying the 20 per cent stake for a cash consideration consisting of €645 million for Credit du Nord’s banking activities and €31 million for its wealth management subsidiary, Etoile Gestion.

The deal is financed by a part of the proceeds from the recent capital increase of €4.8 billion.

For SocGen the buyout of Credit du Nord - which also has a private banking arm, Banque Credit du Nord - will help strengthen its retail business, particularly on the domestic market.

In a simultaneous transaction, Dexia is purchasing Credit du Nord’s 20 per cent stake in Dexia Credit Local de France Banque for a cash consideration of €13 million.

For Dexia, the deals are part of a restructuring plan undertaken to streamline and simplify its portfolio of assets.