As Russia’s attacks in Ukraine continue, Societe Generale explains that it will constantly monitor the situation in both countries and ensure that customers and all employees are supported with the utmost care. Banks will strictly comply with the regulations in force and will enthusiastically take the necessary steps to enforce them as soon as international sanctions are published.
At the group level, exposure to Russia represents 1.7% of total exposure. That is, as of December 31, 2021, € 18.6 billion based on the exchange rate for that day. This translates to € 15.4 billion exposure (“onshore exposure”) booked in SG Russia and € 3.2 billion exposure (“offshore exposure”) booked outside Russia, including € 2.6 billion on the balance sheet. It is classified.
Activities in Russia (SG Russia) will account for 2.8% of the Group’s net bank revenue and 2.7% of net revenue in 2021. They are primarily related to the 99.97% Rosbank Bank subsidiary owned by the Group. The CET1 ratio is 10.74%, which exceeds local regulatory requirements by 274 basis points, and as of December 31, 2021, the loan-to-deposit ratio is approximately 80% and is operated independently in terms of liquidity. These exposures are primarily denominated in local currency, with 99.7% for individuals and 68% for businesses.
Local exposure to sanctioned companies’ counterparties and financial institutions is very low (€ 200 million).
We carry out our activities in Russia with the utmost care and choice to support our historic customers. Its priority is to mitigate risk and maintain the liquidity of the subsidiary by maintaining a diverse collection of deposits. The ruble’s clearing activities will be carried out entirely from Rosbank on behalf of the Group’s main customers.
With a CET1 ratio of 13.7% as of December 31, 2021, a maneuver margin that exceeds regulatory requirements by approximately 470 basis points, the Group has fully absorbed the consequences of extreme scenarios that could affect ownership. can. Russian bank assets. Its impact on capital is approximately -50 basis points of the CET1 capital ratio, taking into account € 500 million of subordinated debt, especially based on Rosbank’s net book assets worth € 2.1 billion as of December 31, 2021. It is estimated. Related risk-weighted assets. In this scenario, you should not question the payment of dividends for the 2021 fiscal year.
In addition, Societe Generale has little exposure to Ukraine (less than € 80 million as of December 31, 2021), primarily through its subsidiary ALD.
Offshore exposure to Russia consists essentially of transactions set up as part of global banking and investor solution financing activities, worth € 3.2 billion with leading counterparties in the field of activity. These are especially relevant to the following sectors: € 2.2 billion in the “metallurgy and minerals” sector, € 700 million in the energy sector, € 200 million in the transportation and telecommunications sector, and 0.1 MdE from financial institutions.
The sanctioned counterparty is worth about € 700 million in net offshore balance. To be on the safe side, sanctions prohibit the closing of new transactions, but they do not necessarily prevent the settlement of the business or the repayment of the loan.
Societe Generale also has a net balance of approximately € 300 million for private banking customers, primarily mortgages and mortgages.
At this stage, the Group has not changed the cost of its risk targets and will update them as necessary when publishing results in the first quarter of 2022.