Societe Generale ceases its activities in Russia and signs an agreement to sell Rosbank and its Russian insurance subsidiaries

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 former shareholder of Rosbank. With this agreement, reached after several weeks of intense work, the Group would withdraw effectively and in an orderly manner from Russia.(one) ensuring continuity for your employees and customers.

The proposed operation, which is subject to the approval of the competent regulatory and competition law authorities, will be carried out in compliance with current legal and regulatory obligations. The 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 around 20 basis points based on asset value as of December 31, 2021(two). This would be mainly due to the impact of the impairment of the net book value of the assets sold, largely offset by, on the one hand, the deconsolidation of the local exposure to Russia (~15.4 billion EAD as of December 31, 2021(3)) and, on the other hand, a payment in favor of Société Générale that includes, in particular, the repayment by the buyer of the subordinated debt granted by Société Générale to its subsidiary.

Pro-forma of this transaction, the Group’s CET1 ratio would remain comfortably above of the Group’s financial objective. As a reminder, the Group’s CET1 ratio as of December 31, 2021 was 13.7%, that is, 470 basis points above the minimum required by regulations.

The planned sale must give rise to the recording in the Group’s profit and loss account(4) of the following main elements:

  • the impairment of the net book value of the divested businesses (~2,000 million euros(5)) ;
  • an exceptional non-monetary item with no impact on the Group’s capital ratio (~1.1 billion euros(5)), corresponding to the normative entry in the expense account of the conversion reserve.

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

  1. ALD Automotive OOO, which operates in Russia and in Kazakhstan through its branch, and ALD Belarus LLC are no longer entering into new business 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 of 12/31/21.
  4. Recognized 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 final impact would be calculated based on the data and the prevailing exchange rate on the date of completion of the transaction. The date of accounting embargo would depend on the date of completion of the operation.
  6. Subject to the usual agreements of the ECB and the Joint General Meeting of Shareholders.

Press contacts:
Jean-Baptiste Froville_+33 1 58 98 68 00_ jean-baptiste.froville@socgen.com
Fanny Rouby_+33 1 57 29 11 12_ fanny.rouby@socgen.com

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