European financial services group Societe Generale has announced that it will cease its banking and insurance activities in Russia and sell off its stake in Russian bank Rosbank, while also offloading its insurance subsidiaries in the country.
By selling its stakes in the Russian businesses back to Interros Capital, the previous shareholder of Rosbank, the group says it will be able to exit Russia in an “orderly manner” that ensures continuity for employees and clients.
This move, made in response to Russia’s widely condemned invasion of Ukraine, follows similar exits from other insurance and reinsurance companies, including brokers Aon, WTW and Marsh McLennan.
The impact of the disposal of Rosbank and the Group’s Russian insurance activities on the Group’s CET ratio is expected to be around 20 basis points based on the net value of the disposed assets as of December 31, 2021.
It would mainly result from the impact of the write-off of the net book value of the disposed assets, largely offset by, on the one hand, the deconsolidation of the local exposure to Russia and on the other, a payment in favor of Societe Generale including notably the repayment by the purchaser of the subordinated debt granted by Societe Generale to its subsidiary.
The disposal would result in the write-off of the roughly €2 billion net book value of the divested activities and an exceptional non-cash item of €1.1 billion.
