The French bank Socit Generale assured Thursday to be able to resist a possible loss of control of its Russian subsidiary Rosbank, according to a press release.
Socit Generale indicates that it is fully capable of absorbing the consequences of a possible extreme scenario which would affect property rights over its banking assets in Russia.
The group is present in Russia via its subsidiary Rosbank, whose activities represented in 2021 2.8% of its total net banking income (equivalent to turnover) and 2.7% of net income. In Russia, the bank with the red and black logo weighed 18.6 billion euros as of December 31, 2021, of which 15.4 billion (or 83%) accounted for in its subsidiary Rosbank, specified Socit Generale. In the accounts at the end of 2021, the subsidiary is valued at 3.2 billion euros.
By integrating the effects of exchange rates (-1 billion euros) and those of a loan of 500 million euros made by the group, a scenario of total depreciation of Rosbank would affect the accounts of Socit Generale in the amount of 2.7 billion euros . Or nearly half of the bank’s record net profit last year. An invoice that Socit Generale brings back 1.8 billion euros once the commitments made by Rosbank have been canceled, specifies the company.
Rosbank: 5million individual customers
In retail banking, Russia is nonetheless the third country for Socit Generale after France and the Czech Republic, according to the group’s available data. And the second in terms of employees, with more than 12,000 employees, or one tenth of the total workforce. A heavyweight in the Russian banking market, with 5 million individual customers in particular, Rosbank is considered a systemic institution by the Russian Central Bank.
In detail, outstandings with individual customers represent around 41% of Socit Gnrale’s exposure in Russia, and companies around 31%. Socit Generale specified that it held Russian public debt securities for 3.7 billion euros, including approximately 1.2 billion euros in the form of State securities.
In Ukraine, the French bank, on the other hand, has very little exposure, with less than 80 million euros as of December 31, 2021, mainly through its subsidiary ALD, whose activity is focused on a clientele of international companies.
Two other major European players in the sector are directly affected by an escalation of tensions between Westerners and Russians: the Austrian banking group Raiffeisen and the Italian Unicredit.
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