Banks

France: banks want to reassure Russia and Ukraine

Societe Generale is one of the French companies most involved in Russia with 18.6 billion euros in the country, mainly in Rosbank, i.e. “exposure limited to 1.7% of the group’s total exposure”.

French banks reveal in turn their exposure to billions of euros in Russia and Ukraine, with the desire to reassure investors worried about the economic impact of the war.

Societe Generale, the most exposed

Societe Generale is one of the major French companies most involved in Russia: it is present there through its subsidiary Rosbank, a heavyweight in the Russian banking sector with some 12,000 employees.

As of December 31, 2021, the group was exposed to the tune of 18.6 billion euros (19.1 billion francs) in the country, including 15.4 billion just for Rosbank, she indicated in a press release last Thursday. .

The bank with the red and black logo assured on this occasion that its “exposure to Russia is limited to 1.7% of the total exposure of the group”.

Societe Generale also said it was “fully capable” of resisting a possible loss of control of Rosbank. A total depreciation of its subsidiary would cost it 2.7 billion euros, or almost half of its net profit last year, a bill reduced to 1.8 billion euros “once the commitments carried by Rosbank are canceled “.

In Ukraine, the French bank is less exposed: it operates there mainly through its car leasing subsidiary ALD, which focuses on “an international corporate clientele” and was committed as of December 31, 2021 to the tune of 80 million euros. euros in the country.

Crédit Agricole and BNP Paribas: several billions committed

Crédit Agricole operates in Russia and Ukraine through two subsidiaries, one of which specializes in corporate and investment banking on Russian soil.

Its “commercial commitments” in Ukraine amounted to 1.5 billion euros as of December 31, “or approximately 0.15% of the commercial commitments” of the group, she indicated on Monday.

In Russia, they represented a total of 4.5 billion euros (including 1.5 billion “off-balance sheet”), approximately 0.45% of the group’s commitments.

BNP Paribas said Wednesday that its exposure to Ukraine amounted to 1.7 billion euros, or 0.09% of the group’s total commitments. In Russia, it is 1.3 billion euros or 0.07% of its commitments.

Faced with “the gravity of the current situation and the humanitarian impact of the aggression against Ukraine”, the group has however decided to postpone an event for investors scheduled for March 14 to a later date.

The BPCE group (Banque Populaire, Caisse d’Épargne and the former Natixis bank networks) and Crédit Mutuel are much less exposed to the two countries at war, up to 851 million and 150 million euros respectively.

Occupy the land

Behind these successive communications from French banks, “there is a desire to reassure the market”, explains Laurent Le Grin, analyst at Degroof Petercam AM, to AFP.

“The idea of ​​this communication is to inform the market about the ‘true’ estimates and therefore the ‘true’ risks and to have a correct estimate of what they can lose,” he continues.

A wind of panic has blown on the financial markets since the start of the Russian invasion on February 24, with heavy losses on the stock market for the companies most present in Russia.

Between the peak reached on February 10 in the wake of the publication of record 2021 results and a low point on Monday, Societe Generale shares, for example, lost half of their value.

She made up a small part of her delay on Wednesday, gaining nearly 10% around 2:00 p.m.

According to Laurent Le Grin, the risk for the banks is however not as important as during the financial crisis of 2008. “The exposures are limited and the context is different,” he argues.

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