Societe Generale to cease operations in Russia and sign an agreement to sell Rosbank and its Russian insurance subsidiaries

Societe Generale to discontinue its banking and insurance activities in Russia and announce the signing of an agreement to sell its entire stake in Rosbank and its insurance subsidiaries in Russia to Interros Capital, the former shareholder of Rosbank. With this agreement, reached after several weeks of intensive work, the Group would withdraw from Russia in an effective and orderly manner.⁽¹⁾ to guarantee continuity for its employees and customers.

The proposed transaction, which remains subject to the approval of the appropriate regulatory and competition law authorities, will be executed in accordance with applicable legal and regulatory obligations. Completion of this operation should take place in the coming weeks.

The impact of the sale of Rosbank and insurance activities in Russia on the Group’s CET1 capital ratio should be approximately 20 basis points based on the asset value as at 31 December 2021⁽²⁾† This would primarily be due to the impact of the impairment loss on the net book value of the assets sold, largely offset by the deconsolidation of the local exposure to Russia (~15.4 billion EAD as of December 31, 2021)⁽³⁾) and, on the other, a payment in favor of Société Générale, including, in particular, the repayment by the purchaser of the subordinated debt allocated by Société Générale to its subsidiary.

Proforma of this transaction, the Group’s CET1 ratio would be well above of the Group’s financial objective. As a reminder, the Group’s CET1 ratio at December 31, 2021 was 13.7%, ie 470 basis points above the minimum regulatory requirement.

The planned sale should lead to recognition in the income statement of the Group⁽⁴⁾ of the following main elements:

• the impairment of the net book value of divested activities (~2 billion euros⁽⁵⁾†
• an exceptional non-cash item with no impact on the Group’s capital ratio (~€1.1 billion⁽⁵⁾), corresponding to the normative entry on the cost account of the conversion reserve.

The Group confirms its full distribution policy for the 2021 financial year namely the dividend of EUR 1.65 per share, subject to approval by the Combined General Meeting of Shareholders on May 17, 2022, and the announced share buyback program for an amount of approximately EUR 915 million⁽⁶⁾†

1. ALD Automotive OOO, which operates through its subsidiary in both Russia and Kazakhstan, and ALD Belarus LLC are no longer entering into new commercial transactions.
2. Value as of 12/31/21 based on a EUR/RUB exchange rate of 85.
3. Or ~ €10.7 billion in risk-weighted assets (“RWA”) as at 31/12/21.
4. Included in “net gains or losses on other assets”.
5. Based on unaudited estimated data as of 02/28/22 and a EUR/RUB exchange rate of 92. The ultimate impact would be calculated based on the data and exchange rate in effect on the closing date of the transaction. The date of the accounting supplement would depend on the date of completion of the operation.
6. Subject to the usual arrangements of the ECB and the Combined General Meeting of Shareholders.

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