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French banking group Societe Generale has issued a warning that it could be stripped of property rights to its Russian banking operations due to the fallout from Russia’s invasion of Ukraine.

As of 31 December 2021, Societe Generale’s total exposure to Russia stood at €18.6bn ($19.97bn).

After Russia launched a military operation against Ukraine last week, the US and its European allies imposed severe financial sanctions on the country.

“The Group has more than enough buffer to absorb the consequences of a potential extreme scenario, in which the Group would be stripped of property rights to its banking assets in Russia,” Societe Generale said in its statement.

Of the €18.6bn, the French bank said €15.4bn exposure is to its Russian business SG Russia and €3.2bn is outside Russia.

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Most of the SG Russia exposure comes from its banking subsidiary Rosbank, which is 99.97%-owned by the lender.

Retail outstanding exposure, which includes 70%- secured mortgage and auto loans, is nearly 41% of SG Russia’s total exposure.

SG Russia has €500m exposure to financial institutions and €3.7bn exposure comes from Russian sovereign debt and that of assimilated entities.

The bank said it is closely watching the developments in Ukraine and Russia.

Currently, the lender’s priority includes reducing risk and preserving the liquidity of its subsidiary by having a diversified collection of deposits.

About the exposure to Ukraine, the lender said its exposure to the country is minor, which represents less than €80m primarily through its subsidiary ALD.