Société Générale has just announced its results: a loss of 1.5 billion euros in Q2 2022. Its subsidiary, Rosbank, has been acquired by the Russian investment fund Interros, founded by an oligarch close to Vladimir Putin.
Sale of Russian subsidiary Rosbank
On August 3, Société Générale announced a net loss of almost 1.5 billion euros following the sale of its Rosbank subsidiary in May. A few months ago, the bank decided to cease its activities in Russia and signed an agreement to sell its entire stake in Rosbank, as well as its insurance subsidiaries, to Interros Capital.
Rosbank, a heavyweight in the Russian banking sector, brought in €115 million for Société Générale in 2021 on sales of €643 million, representing respectively 2% and 2.5% of the group as a whole.
The negative impact of his departure has been quantified by the bank at 3.2 billion euros, a figure corresponding to "the impairment of the net book value of divested activities" (around 2 billion euros) and "an exceptional non-cash item with no impact on the Group's capital ratio" (around 1 billion euros).
The #T22022 concludes two years of intense and disciplined execution of our strategic projects. We combined strong revenue growth and profitability at S1, confirming the resilience of our business model, and remain confident about achieving our 2025 ambitions. pic.twitter.com/QFihPCb5wO
- Frédéric Oudéa (@FredericOudea) August 3, 2022
A smaller loss than expected
While Reuters analysts were expecting a loss of 2 billion euros this quarter, Societe Generale did better than expected. This was due in particular to record levels of activity. The bank's net banking income now stands at over 7 billion euros, up 12%, and growing faster than revenues. Operating income rose by 18.8% to 2.39 billion euros.
"These dynamics and performances give us confidence both in the short term, in an undeniably more uncertain environment, and in the medium term," says Frédéric Oudéa, the Group's Chief Executive Officer, in a press release.
Numerous projects in progress
"We were able to manage our exit from Russian activities [...] without handicapping the Group's strategic developments," says Frédéric Oudéa in the press release.
The bank has many other projects in the pipeline. For example, it has paid 4.9 billion euros to acquire LeasePlan, a Dutch group that has established itself as the European leader in car fleet management. In this way, the red and black bank aims to create a world champion in car leasing with its subsidiary ALD.
Another project underway is the merger of the group's retail networks. Société Générale intends to reduce the number of branches in its networks by more than a quarter, to 1,500 sites. On January 1, 2023, the merger between the Société Générale and Crédit du Nord networks will become legally official. The composition of the Top 300 managers who will lead the new entity was recently announced.