Thursday, July 7, 2022
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SocGen quits Russia with sale of Rosbank to oligarch Potanin

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EDITOR'S CHOICE

French bank Societe Generale said on Monday it would quit Russia with a deal to sell its stake in Rosbank to Interros Capital, a firm linked to Russian oligarch Vladimir Potanin, the head of mining giant Norilsk Nickel. Under the deal, Rosbank will rejoin the business empire of Potanin, 61, who has been sanctioned by Canada as part of a wave of western moves against Russia’s business and political elite in retaliation for Moscow’s invasion of Ukraine.

The financial terms of the sale were not announced, but SocGen said it would result in a hit of more than 3 billion euros ($3.3 billion). Interros has also agreed to pay off Rosbank’s subordinated debt. The negative impact on SocGen’s capital buffers was just 20 basis points and the bank said it was sticking to its share buyback and dividend plans.

SocGen had previously flagged the risk of a write-off on its 99% stake in Rosbank and investors welcomed the clarity, sending its shares up as much as much as 8% on Monday. 

The sale to Potanin was not universally applauded.

“It’s a bit distressing that ultimately this is an enormous gift to one of the wealthiest oligarchs,” said Jerome Legras, head of research at Axiom Alternative Investments.

The French finance ministry declined to comment when asked whether the government played a role in the negotiations. It declined to comment on Potanin’s status as a sanctioned individual.

Russia’s invasion of Ukraine, which Moscow describes as a “special operation”, has prompted a wave of foreign companies to shutter their Russian businesses. Orchestrating a full exit is, however, more difficult due to the sanctions and political sensitivities. SocGen’s exit is the first among major banks with European rivals including Italy’s UniCredit (CRDI.MI) and Austria’s Raffeisen (RBIV.VI) still considering their futures in Russia.

Asked whether SocGen’s deal meant other companies could sell their assets to Russian buyers, Kremlin spokesman Dmitry Peskov said on Monday: “This depends on the decision of an owner of a specific company which is leaving Russia”.

Ara D. Kassabian CPA, based in Glendale, California, provides a full range of tax preparation, accounting and bookkeeping services, either in your facility or at our location. Making it quick and easy to file your taxes.

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Ara D. Kassabian CPA, based in Glendale, California, provides a full range of tax preparation, accounting and bookkeeping services, either in your facility or at our location. Making it quick and easy to file your taxes.

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