PARIS (Agefi-Dow Jones)–Societe Generale announced on Monday that it has ceased its banking and insurance activities in Russia, and has reached an agreement to sell its stake in the Russian bank Rosbank as well as its Russian subsidiaries to insurance to Interros Capital. This Russian investment fund was the previous shareholder of Rosbank.
“With this agreement, concluded after several weeks of intensive work, the group would withdraw in an effective and orderly manner from Russia while ensuring continuity for its employees and customers,” Societe Generale said in a press release.
Investors welcome the announcements of the bank headed by Frédéric Oudéa. On the Paris Stock Exchange, Societe Generale shares rose 5.8% to 23.13 euros around 10:40 a.m., marking the strongest increase in the SBF 120.
A limited impact on the capital ratio
“The impact of the disposal of Rosbank and the insurance activities in Russia on the group’s CET1 capital ratio is expected to be around 20 basis points based on the equity value as of December 31, 2021”, underlined the French bank.
“This would mainly result from the impact of the depreciation 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”, of approximately 15.4 billion euros. euros at the end of December, “and on the other hand, a payment in favor of Societe Generale including in particular the reimbursement by the purchaser of the subordinated debt granted by Societe Generale to its subsidiary”, specified the establishment.
At the end of December, the bank’s CET 1 ratio stood at 13.7%, or 470 basis points above the minimum regulatory requirement.
KBW considers “limited” the impact of the sale of Societe Generale’s Russian activities and considers that the establishment’s announcements should constitute “a relief” for its shareholders.
“Once the impact on earnings and shares (2.7% and 4% respectively) is removed, the 27% underperformance of [l’action Société Générale] compared to the sector since the Russia / Ukraine war should, in our opinion, be partially filled”, continues KBW.
The bank expects to finalize this operation “in the coming weeks”. This disposal project will lead the group to post a charge of approximately 2 billion euros to its income statement, corresponding to the net book value of the activities sold.
The distribution policy maintained
Societe Generale will also record an “exceptional non-cash item with no impact on the group’s capital ratio” of approximately 1.1 billion euros, which corresponds to “the normative recovery in the expense account of the reserve conversion”.
Despite these announcements, the bank confirmed its entire distribution policy for the 2021 financial year, i.e. a dividend of 1.65 euros per share and a share buyback program of approximately 915 million euros. .
ALD, a subsidiary specializing in long-term vehicle financing of Societe Generale, has announced that its entities in Russia and Belarus will no longer conclude new commercial transactions.
-Julien Marion, Agefi-Dow Jones; +33 (0)1 41 27 47 94; [email protected] ed: VLV
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April 11, 2022 04:41 ET (08:41 GMT)