Live News: Inflation in Turkey climbs to nearly 70% as cost of food and transport rise
Societe Generale said it expected the war in Ukraine to drive up costs as more customers defaulted on their loans and it exited the Russian market.
The French bank also announced on Thursday a 3.4% increase in its net profit to 842 million euros for the first quarter, compared to the previous year, and a 16.6% increase in its income, because it benefited from market volatility and rising interest rates.
“The planned sale, currently being finalized, of our activities in Russia, following the sudden change in the outlook for this country, will allow the group to disengage in an efficient and orderly manner, ensuring continuity for both its employees and its customers. “said the general manager. executive Frédéric Oudéa.
SocGen raised its cost of risk for the year by 30 to 35 basis points, or up to 1.9 billion euros, after previously saying it would be below 30 basis points.
France’s third-biggest bank said its Tier 1 core capital ratio – an important measure of its financial strength – would drop 20 basis points to 12.9% following its planned Russia divestiture.
SocGen announced last month that it was selling its entire 99.98% stake in Rosbank, along with its Russian insurance business, to an investment firm founded by Russian billionaire Vladimir Potanin.
The French bank said it would take a 3.1 billion euro hit after the sale to Interros Capital of Potanin after it came under scrutiny due to its high exposure to the country after the invasion of Ukraine by Russia.
SocGen was one of the three Western financial institutions with the most exposure to Russia, alongside Austrian Raiffeisen and Italy’s UniCredit. The other two announced that they were considering exit strategies.