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

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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. With this agreement, reached after several weeks of intensive work, the Group would withdraw in an effective and orderly manner from Russia.(1) ensuring continuity for its employees and customers.

The proposed transaction, which remains subject to the approval of the competent regulatory and competition law authorities, will be carried out in compliance with the legal and regulatory obligations in force. The finalization 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 the asset value as of December 31, 2021(2). This would mainly result from the impact of the impairment of the net book value of the assets sold, very largely offset by, on the one hand, the deconsolidation of the local exposure to Russia (~15.4 billion EAD at 31 December 2021(3)) and on the other hand, a payment in favor of Société Générale including in particular the reimbursement by the purchaser 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 target. As a reminder, the Group’s CET1 ratio as of December 31, 2021 was 13.7%, i.e. 470 basis points above the minimum regulatory requirement.

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

  • the impairment of the net book value of divested businesses (~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 into 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 Combined General Meeting of Shareholders of 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 as well as in Kazakhstan through its branch, and ALD Belarus LLC are no longer entering into any new commercial transactions.
  2. Value at 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 exchange rate in effect on the date of finalization of the transaction. The date of accounting attachment would depend on the date of finalization of the operation.
  6. Subject to the usual agreements of the ECB and the Combined 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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