Societe Generale: „the Group is fully able to absorb the consequences of a possible extreme scenario which would affect the property rights over its banking assets in Russia”

This scenario would not call into question the payment of the dividend for the 2021 financial year, the Societe Generale Group said in a press release.

By following the development of the situation in Ukraine and Russia with the greatest attention, the Group is committed to supporting its customers and all of its employees. Societe Generale rigorously respects the regulations in force and diligently implements the necessary measures to strictly apply, as soon as they are published, international sanctions.

At Group level, exposure to Russia ⁽¹⁾ represents 1.7% of total exposure, i.e. €18.6 billion as of December 31, 2021 based on exchange rates on that date. It breaks down into €15.4 billion of exposure recorded in SG Russia ⁽³⁾ (“On-shore exposures”) and €3.2 billion of exposure recorded outside Russia (“Off-shore exposures”). shore”), including 2.6 billion euros on the balance sheet.

Activities located in Russia (SG Russia ⁽³⁾ ) represent 2.8% of the Group’s net banking income in 2021 and 2.7% of net income ⁽²⁾ . They mainly concern our banking subsidiary Rosbank, 99.97% owned by the Group. It has a solid capital position, with a CET1 ratio of 10.74%, i.e. 274 basis points above the local regulatory requirement, and operates independently in terms of liquidity, with a loan to deposit ratio of around 80% as of December 31, 2021. These exposures are largely denominated in local currency, 99.7% for individuals and 68% for companies. 

With a CET1 ratio of 13.7% as of December 31, 2021, i.e. a margin of maneuver of approximately 470 basis points above the regulatory requirement, the Group is fully able to absorb the consequences of a possible extreme scenario that would affect ownership rights over its banking assets in Russia. Its capital impact is estimated at around -50 basis points of CET1 capital ratio, based in particular on Rosbank’s net book assets equivalent to 2.1 billion euros as of December 31, 2021, 0.5 billion euros of subordinated debt and taking into account the cancellation of the associated risk-weighted assets. 

In addition, Societe Generale has minor exposure to Ukraine (less than €80 million as of December 31, 2021), mainly through its subsidiary ALD, whose activity is focused on international corporate clients.