Societe Generale announces that it will cease its banking and insurance activities in Russia.
Societe Generale announces this Monday morning to cease its banking and insurance activities in Russia.
“Societe Generale ceases its banking and insurance activities in Russia, and announces the signing of an agreement to sell its entire stake in Rosbank as well as its insurance subsidiaries in Russia to Interros Capital, the previous shareholder of Rosbank,” the group announced in a press release.
Societe Generale does not give a date for the finalization of this transaction but evokes a time horizon “in the coming weeks”.
“With this agreement, concluded after several weeks of intensive work, the group would withdraw in an effective and orderly manner from Russia while ensuring continuity for its employees and customers”, specifies the French bank.
A negative impact of 3.1 billion euros
This departure from Russia will have a cost for Societe Generale. The bank figures the negative impact of this departure at 3.1 billion euros, i.e. “the depreciation of the net book value of the activities sold (~2 billion euros)” and “an exceptional non-cash item with no impact on the Group’s capital ratio, (~1.1 billion euros), corresponding to the normative recovery in the charge account of the conversion reserve”, can we read in the press release.
At the beginning of March, in a press release, the leaders of the bank wanted to be reassuring, saying they were able to absorb the consequences of its exposure in Russia (18.6 billion euros at the end of 2021). Last year, its activities located in Russia represented 2.8% of net banking income and 2.7% of the group’s net income. But faced with the withdrawal of other major banks, several analysts felt that the position of Société Générale was difficult to maintain. However, the bank’s financial situation seems solid, after recording a record profit of 5.6 billion euros in 2021.