Société Générale, France’s third largest bank, said on Monday that it would pull out of Russia by selling its controlling stake in Rosbank.Credit...Sarah Meyssonnier/Reuters


Société Générale, France’s third largest bank, said on Monday that it would pull out of Russia by selling its controlling stake in Rosbank, a Moscow-based lender, to Interros Capital, a company headed by Vladimir O. Potanin, one of Russia’s wealthiest men.
Société Générale said the deal, which includes the sale of a Russian insurance subsidiary, would allow it to “exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients.” The French lender is among the European banks most exposed to Russia.
The bank said in a statement that the sale would result in a hit of 3.1 billion euros ($3.3 billion), comprising a financial write-off of about €2 billion and a related charge of €1.1 billion.
Shares in Société Générale rose more than 7 percent after the news was announced.
Mr. Potanin owns, among other things, Norilsk Nickel, the world’s largest nickel producer, with vast operations in Siberia. This month, Canada added him to its financial sanctions list. Last month, Mr. Potanin stepped down as a trustee of the Guggenheim Museum, a position he had held since 2002.
Banks in France, Italy and Austria have the largest exposure to Russia, according to data from the Bank for International Settlements.
Austria’s Raiffeisen Bank employs 9,000 people in its Russian operations, which account for about 10 percent of its assets. The company said last month that it was “assessing all strategic options” for its business there.
Italy’s UniCredit employs some 4,000 in Russia and estimated its net exposure at €1.9 billion, although it recently warned that the financial hit from an “extreme scenario” could be much larger. Before the invasion of Ukraine, UniCredit had been trying to sell its stake in the company that controls Alfa Bank, one of Russia’s largest privately owned banks, which has been complicated by international sanctions against the lender.
Société Générale first acquired a 20 percent stake in Rosbank in 2006, buying it from Mr. Potanin’s Interros, and increased its holdings in subsequent years. It stayed in Russia after the global financial crisis forced many Western banks to pull out, some because they had struggled to compete with the state-run consumer banking giant, Sberbank.
French companies have come under fire for remaining in Russia since the invasion of Ukraine while other Western businesses have withdrawn or suspended operations. Last month the Ukrainian president, Volodymyr Zelensky, addressed the French Senate and called on retailers like Leroy Merlin and the carmaker Renault to pull out and “stop being responsible for Russia’s war machine.”
Since then, Renault announced it would immediately suspend the activities of its Moscow factory and review its business in Russia. And Decathlon, a French sporting goods giant, said it would suspend operations at its 60 Russian stores because sanctions had made it difficult to continue importing goods.

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Source: New York Times

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