PARIS (Reuters), Societe Generale announced Monday that it has agreed to sell Rosbank’s stake and Russian lenders’ insurance subsidiaries to Interros Capital. Interros Capital is a company linked to Vladimir Potanin. This lifted the French bank’s share price.

Russia’s invasion in Ukraine has led to financial sanctions being imposed by the United States and Europe. This has caused Western companies across the globe to sell Russian assets.

Rosbank joins Potanin’s business empire, which is the largest shareholder in Norilsk Nickel. This company, the world’s biggest producer of palladium, refined nickel, and other metals, will become the new owner.

Potanin had Rosbank as a holding company since 1998. SocGen purchased a share in 2006, and then merged the two companies in 2010.

While he has not been sanctioned by the European Union, Potanin has been sanctioned by the government of Canada https://www.international.gc.ca/world-monde/international_relations-relations_internationales/sanctions/russia_regulations-reglement_russie13.aspx?lang=eng over the Russian invasion of Ukraine, which Moscow describes as a “special military operation”.

SocGen previously warned of the possibility that its Rosbank stake might be written off.

France’s third-largest Bank shares rose as much as 8 percent Monday following its announcement that Rosbank would be ending its over 15-year old holding. There is mounting pressure to end ties with Russia.

SocGen declined to disclose how much Interros Capital would pay for the stake. However, it stated the deal would permit Rosbank to exit Russia in a “effective and orderly” manner and maintain continuity for its clients and employees.

Interros stated in a statement, that the agreement should close in the following weeks once all regulatory approvals have been received.

SocGen stated that the deal would lead to a writeoff of approximately 2 billion Euros ($2.2 billion), and an extraordinary non-cash item. However, it will not have any impact on SocGen’s capital ratio.

According to SocGen, the write-off will be partially offset by Russia’s 15.4 billion Euro exposure and an undisclosed payment that includes the repayment of Interros Capital subordinate debt.

SocGen purchased a share of Rosbank for the first time in 2006, with the option to acquire a majority stake in 2008. In 2010, the Russian bank was merged into other Russia operations of SocGen.

Rosbank’s deal with SocGen will reduce SocGen’s CET 1 capital ratio of about 20 basis points. However, the Rosbank deal would not affect SocGen’s guidance and the ratio would still be “comfortably high”.

($1 = 0.9192 euros)