PARIS (BLOOMBERG) - Societe Generale (SocGen) will take a hit of about €3 billion (S$4.5 billion) after agreeing to sell its Rosbank unit to the investment firm of Russia's richest man.
The Paris-based bank signed an accord to sell its entire stake in Rosbank and its Russian insurance subsidiaries to Mr Vladimir Potanin's Interros Capital, according to a statement on Monday (April 11).
SocGen said it will continue its plans for a stock buyback of €915 million and a 2021 dividend of €1.65 a share.
SocGen's decision to exit Russia is the most decisive yet among the largest European banks with operations in the nation. Both Raiffeisen Bank International and UniCredit are also considering their future in the country. The three banks are the biggest on the continent with Russian businesses.
SocGen said it will have a €2 billion write-off of the net book value of the divested activities and an exceptional non-cash item of €1.1 billion related to the reversal of the conversion reserve in the group's income statement.
SocGen chief executive officer Frederic Oudea last month signalled that the bank planned to stay flexible in Russia, stopping short of joining European rivals pledging to review or exit their business in the country after Russia's invasion of Ukraine.
SocGen's Russian business generated 2.7 per cent of last year's profit and accounts for 1.7 per cent of the bank's total exposure. Local activities are mainly exposed to retail and large corporate clients.
Interros was the previous shareholder of Rosbank.