https://sputnikglobe.com/20220412/frances-socgen-bank-sells-rosbank-pulls-out-of-russian-market-at-336-billion-loss-1094715553.html
France’s SocGen Bank Sells Rosbank, Pulls Out of Russian Market at $3.36 Billion Loss
France’s SocGen Bank Sells Rosbank, Pulls Out of Russian Market at $3.36 Billion Loss
Sputnik International
On Monday, French bank Société Générale announced it, too, would end its activities in Russia, following decisions to do so by France’s two larger banks, BNP... 12.04.2022, Sputnik International
2022-04-12T22:29+0000
2022-04-12T22:29+0000
2022-04-12T22:29+0000
societe generale
rosbank
france
russia
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The bank announced it would be selling its Russian subsidiary Rosbank and its insurance activities in Russia to Interros Capital, an investment firm owned by Russia’s richest man, former deputy prime minister Vladimir Potanin.However, in doing so SocGen has accepted a loss of $3.36 billion. Last month, the bank said it had about $20 billion of exposure to Russia, which is under sanction by many Western nations in response to the launching of the special neutralization operation in Ukraine on February 24.BNP Paribas, France’s largest bank, and Credit Agricole, its second-largest, pulled out of their Russian operations last month. Both banks had a fairly small exposure to Russia by comparison: just $1.4 billion for Paribas and $7.28 billion by Credit Agricole. However, the banks have not commented on their losses due to the withdrawal.Other Western banks have similarly made flight from Russia since February, especially after the US instituted widespread sanctions targeting the Russian economy, including its largest banks and state-owned enterprises, as well as freezing some $400 billion in foreign currency reserve assets in conjunction with the other Group of Seven nations. In addition, all sanctioned Russian banks have been excluded from the Brussels-based SWIFT international bank wire service.Despite this, Russian Finance Minister Anton Siluanov said on Tuesday that Russian payments were being made, albeit in rubles instead of dollars, and Western financial institutions would have to make the conversions themselves. He also rejected the notion that just because Russia was blocked from making some payments, it was therefore defaulting on its debt.The Russian ruble has also recovered from a decline after Western sanctions, ending Tuesday at the same value it had when the Ukraine operation began: $0.12 dollars per ruble.The Ukraine operation was launched after months of failed negotiations over NATO’s eastward expansion and the continuing war in the Donbass, where Ukraine’s ultra-nationalist government has waged an eight-year-long war to return two Russian-speaking people’s republics to Kiev’s control. Moscow has said the operation will end when the neo-Nazi forces in Ukraine are destroyed, the country’s military is neutralized, and Kiev forswears membership in the NATO alliance.
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France’s SocGen Bank Sells Rosbank, Pulls Out of Russian Market at $3.36 Billion Loss
On Monday, French bank Société Générale announced it, too, would end its activities in Russia, following decisions to do so by France’s two larger banks, BNP Paribas and Crédit Agricole.
The bank announced it would be selling its Russian subsidiary Rosbank and its insurance activities in Russia to Interros Capital, an investment firm owned by Russia’s richest man, former deputy prime minister Vladimir Potanin.
“This contemplated transaction, which remains subject to the approval of the relevant regulatory and antitrust authorities, will be conducted in compliance with the legal and regulatory obligations in force. The closing of this operation should occur in the coming weeks,” the bank
said in a statement.
However, in doing so SocGen has accepted a loss of $3.36 billion. Last month, the bank said it had about
$20 billion of exposure to Russia, which is
under sanction by many Western nations in response to the launching of the special neutralization operation in Ukraine on February 24.
Rosbank’s shares
jumped in value by 40% on Monday following the news.
BNP Paribas, France’s largest bank, and Credit Agricole, its second-largest, pulled
out of their Russian operations last month. Both banks had a fairly small exposure to Russia by comparison: just
$1.4 billion for Paribas and
$7.28 billion by Credit Agricole. However, the banks have not commented on their losses due to the withdrawal.
Other Western banks have similarly made flight from Russia since February, especially after the US instituted
widespread sanctions targeting the Russian economy, including its largest banks and state-owned enterprises, as well as
freezing some $400 billion in foreign currency reserve assets in conjunction with the other Group of Seven nations. In addition, all sanctioned Russian banks
have been excluded from the Brussels-based SWIFT international bank wire service.
The sanctions onslaught was intended to cripple the Russian economy by strangling its ability to do business or for the government to make debt payments. White House spokesperson Jen Psaki boasted the Russian economy was “on the brink of collapse” last week, and US President Joe Biden tried to block Moscow’s ability to make its bond payments.
Despite this, Russian Finance Minister
Anton Siluanov said on Tuesday that Russian payments were being made, albeit in rubles instead of dollars, and Western financial institutions would have to make the conversions themselves. He also rejected the notion that just because Russia was blocked from making some payments, it was therefore defaulting on its debt.
"Default means that the debtor does not have the funds to fulfill its debt obligations or is unwilling to service the debt while having the necessary funds. Neither is the case with Russian debt," Siluanov said.
The Russian ruble has also recovered from a decline after Western sanctions, ending Tuesday at the same value it had when the Ukraine operation began: $0.12 dollars per ruble.
The Ukraine operation was launched after months of failed negotiations over NATO’s eastward expansion and the continuing war in the Donbass, where Ukraine’s ultra-nationalist government has waged an eight-year-long war to return two Russian-speaking people’s republics to Kiev’s control. Moscow has said the operation will end when the neo-Nazi forces in Ukraine are destroyed, the country’s military is neutralized, and Kiev forswears membership in the NATO alliance.
