in

Societe Generale ceases operations in Russia

A Rosbank branch, a subsidiary of Societe Generale, in Moscow, in May 2013.

Societe Generale decided to leave Russia shortly after the war in Ukraine started. However, his boss, Frédéric Oudéa, had internally indicated that, “For a bank that finances the economy, which is overseen by the central bank, you can’t say overnight: I’m going to stop. †

That is why “after a few weeks of intensive work” that the French banking group announced on Monday April 11 the signing of an agreement allowing it to sell all its Rosbank subsidiary and its insurance subsidiaries in Russia to Interros Capital. It is owned by the oligarch Vladimir Potanin, one of the richest men in Russia and close to Vladimir Putin, who controls the mining giant Nornickel. Interros Capital has known the bank well since it was the previous owner of Rosbank, who sold it in blocks to Société Générale from 2006.

Read also Article reserved for our subscribers The war in Ukraine, a dark scenario for Société Générale in its Russian adventure

This operation, to be completed, ” in the coming weeks “, will allow French bank to withdraw money “out of Russia in an effective and orderly manner, ensuring continuity” to its 12,000 employees and its customers, the group specifies. In a separate statement, Interros said on Monday that: “the terms of the agreement” [avaient] approved by the Government Commission for the Control of Foreign Investment in the Russian Federation”

“Significant financial impact”

This departure comes at a high price. Societe Generale more or less leaves the keys behind. Rosbank, one of the main Russian private banks, was bought dearly (4 billion euros in total) and the value of the sold activities has to be written off on the accounts of the French institution. This one, on the other hand, receives ” a deposit “ from the buyer, Interros Capital, which includes the repayment of a debt granted by Societe Generale to its Russian subsidiary for an amount of 500 million euros.

Societe Generale has calculated the cost of this withdrawal at 3.1 billion euros. The tricolor bank, which made a profit of 5.6 billion euros in 2021, must absorb the shock. In a message sent to the group’s employees on Monday morning, Frédéric Oudéa emphasized that: “this sale would have significant financial consequences in 2022, but we can handle them”† The bank also wanted to confirm the payment of a dividend of EUR 1.65 per share (submitted to the vote of the General Meeting of Shareholders on May 17) and announced its share buy-back program for an amount of approximately EUR 915 million. “It’s not fatal to the group, but this episode confirms the view that something always happens at Société Générale, since the Kerviel affair in 2008”notes a former bank manager.

You have 50.79% of this article left to read. The following is for subscribers only.

Buds 3T Pro true wireless headphone test: a nice surprise from Xiaomi

‘We lack nothing to win the Champions League’