The French banking giant said it has agreed to sell its entire Rosbank stake and its insurance subsidiaries to Interros Capital, a conglomerate controlled by metals billionaire Vladimir Potanin. Interros who previously controlled the Russian bank. The oligarch is not on the U.K. sanctions list, but was targeted by Canadian authorities on April 6.
The bank did not disclose a transaction price for the sale, but it added that the deal should be completed "in the coming weeks."
SocGen said it would take a hit of more than €3 billion ($3.3 billion) because of the sell-off, although it expects the impact on its capital buffers to be just 20 basis points — comfortably above guided levels.
The French bank said the deal would allow it to exit Russia in an "an effective and orderly manner" and ensure continuity for Rosbank's employees and clients.
Potanin said that Interros "intends to make every effort to develop Rosbank's business, considering the integration of digital technologies and products into the traditional banking services as a priority. The most important goal of Interros is to maintain the stability of Rosbank and create new opportunities for its clients and partners."
SocGen is exiting Russia after the European Commission rolled out further sanctions on Vladimir Putin's regime in April. The European Union approved a ban on Russian coal imports while proposing a future ban on purchasing oil, hitting two of Moscow's main sources of foreign currency. It also agreed to ban transactions with four key banks, which represent approximately 23% of the Russian market share.
Andrea Enria, the head of the European Central Bank's supervisory board, said on April 7 that European lenders could absorb the losses of institutions leaving Russia. He said that, even in an extreme scenario, losses "would remain manageable" for the banking sector.
SocGen's departure follows other financial heavyweights leaving Moscow, with institutions including Goldman Sachs, JPMorgan Chase and Deutsche Bank all quitting Russia in March.
--Editing by Joe Millis.
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