France’s Societe Generale sells Russian bank to oligarch Vladimir Potanin
By Reuters
Societe Generale said on Monday it had agreed to sell its stake in Rosbank and the Russian lender’s insurance subsidiaries to Interros Capital, a firm linked to billionaire Vladimir Potanin.
Russia’s invasion of Ukraine has triggered financial sanctions from the United States, Europe and Britain, prompting Western companies to sell their Russian assets.
Rosbank will join the business empire of Potanin, who is the biggest shareholder in Norilsk Nickel, the world’s largest producer of palladium and refined nickel.
Potanin’s holding company had owned Rosbank from 1998, before Societe Generale (SocGen) bought a stake in 2006 and merged it with its other Russian operations in 2010.
While he has not been sanctioned by the European Union, Potanin has been sanctioned by the government of Canada over the Russian invasion of Ukraine, which Moscow describes as a “special military operation.”
SocGen had previously flagged the risk of a write-off on its Rosbank stake.
Shares in France’s third-largest bank rose by as much as 8% on Monday after it said it would end its more than 15-year Rosbank holding, amid mounting pressure to cut ties with Russia.
SocGen did not disclose what Interros Capital was paying for the stake but 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.
Interros said in a statement that the deal should be closed in the next couple of weeks after all necessary approvals from regulatory bodies are received.
SocGen said the deal would result in a write-off of about 2 billion euros ($2.2 billion) and an exceptional non-cash item, but have no impact on SocGen’s capital ratio.
The write-off will be “largely offset” by the deconsolidation of its 15.4 billion euro exposure to Russia and by an unspecified payment including the repayment of subordinate debt by Interros Capital, SocGen added in a statement.
SocGen first acquired a stake Rosbank in 2006 with an option to buy a majority holding in 2008. The Russian bank was fully merged with SocGen’s other Russia operations in 2010.
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.
