This is despite the fact that western sanctions against Moscow for its decision to invade Ukraine militarily continue to grow, with support from leading financial institutions.
JPMorgan and Goldman Sachs Scale Down Russian Operations
JPMorgan Chase and Goldman Sachs Group have been the first major American banks in announcing that they will be leaving Russia. This process, according to industry experts, could take several months or even years. They made their decisions after unprecedented sanctions were imposed on Moscow for its military attack on Ukraine.
These restrictions have made it more difficult for banks to conduct business in Russia. According to data from the Bank of International Settlements, while European banks are more vulnerable to Russia than American banks, U.S. banks also have significant exposure totaling $14.7 million.
Goldman Sachs stated in a statement that it is complying with licensing and regulatory requirements. According to a source, the bank is not exiting its operations immediately but is closing down existing businesses. Goldman has a $650 million credit exposure to Russia. In midday trading on Wednesday, its shares dropped 2.8% to $325.97.
JPMorgan stated that it had been complying with all directives from governments around the globe and has been unwinding Russian businesses. It also said that they have stopped pursuing new business in Russia. JPMorgan stated that current activities are limited and it is helping clients worldwide to close existing obligations, manage Russian-related risks, and act as a custodian for clients.
Citigroup announced that its Russian consumer business operations are now limited. The bank has also begun a plan for the sale of the franchise. Citigroup, which has a Russian exposure of almost $10 billion, is the largest U.S. bank. A financial executive already acknowledged that it may lose half of this amount.
Refinitiv data cited in the report shows that Goldman Sachs earned $19.5 million in investment banking income for 2021. JPMorgan was second to Russia’s VTB Capital with $32.8 million. Citigroup earned $22.8 million.
Russia was targeted by growing sanctions for its involvement in the conflict in Ukraine. This has limited Russia’s access to the global financial market and crypto assets. Many Russian banks were removed from SWIFT interbank messaging network. Revolut, Western Union, Paypal and Remitly are all payment and remittance service providers that have suspended their services in the country. also stopped operations of Mastercard and Visa.
