PARIS, May 5 (Reuters) – Socit Generale announced on Thursday an increase in the level of its provisions due to the invasion of Ukraine by Russia, which increases the risk of non-repayment of certain loans.
The third listed French bank said it now expects its cost of risk, which reflects bad debt provisions, to reach 30 to 35 basis points, or 1.7 to 1.9 billion euros in 2022, and no less by 30 basis points as initially planned.
The group announced last month that it had signed an agreement to sell its Russian subsidiary Rosbank, which will result in exceptional charges of around 3.1 billion euros.
In the first quarter, SocGen’s net profit increased by 3.4% to 842 million euros for net banking income of 7.281 billion, up 16.6%, thanks in particular to the dynamism of market activities.
Russia’s withdrawal has reduced the bank’s capital cushion. Its Common Equity Tier One ratio, a key indicator of capital strength, was down to 12.9% at the end of March. (Matthieu Protard, French version Jean-Michel Blot, said by Jean Terzian)