French banking group Société Générale has announced that it is ceasing activities in Russia and selling its majority stake in the indigenous operation Rosbank, French firms have been urged to leave Russia in the wake of Moscow’s invasion of neighbouring Ukraine.
Hundreds of foreign companies, ranging from financial firms to retailers and fast-food restaurants, have pulled out of Russia since the invasion began on 24 February.
French firms, which are the biggest foreign employers in Russia, have been among the slowest to withdraw, prompting Ukrainian President Volodymyr Zelensky to urge them to leave during his address to the French parliament on 23 March.
Société Générale said in a statement that its withdrawal from Russia would cost it 3.1 billion euros.
“Société Générale ceases its banking and insurance activities in Russia,” the firm said in a statement.
The company also announced “the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the Group’s Russian insurance subsidiaries” to Interros Capital, an investment firm founded by one of Russia’s richest oligarchs, Kremlin confidant Vladimir Potanin.
Limited effect on employees, customers
“With this agreement, concluded after several weeks of intensive work, the group will exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,” Société Générale said.
The bank said it expects the deal to be completed in the coming weeks and that it was subject to approval from regulators.
Société Générale shares lost almost six percent of their value following the announcement.
Motor constructor Renault has suspended operations at its Moscow factory and hinted that it might divest its majority stake in domestic car giant AvtoVAZ. French sports retailer Decathlon halted sales at its stores in Russia.
Another major French company singled out by Zelensky, supermarket chain Auchan, has decided to stay, citing the “human” cost of leaving.
The Western exodus followed the invasion and Western sanctions on Russia, including the freezing of 300 billion euros of the country’s foreign currency reserves abroad.
Source: Modern Ghana
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