Goldman Sachs Group and JPMorgan Chase have become the first large American banks to declare their exit from Russia, a process that might take months, if not years, according to industry experts. Their choices come after the imposition of extraordinary sanctions against Moscow in response to its armed assault on Ukraine’s neighbour.
Banking institutions like JPMorgan and Goldman Sachs are finding it more challenging to operate in the Russian Federation due to financial limitations. According to the Bank of International Settlements statistics, while European banks are more exposed to Russia, US institutions have considerable exposure, totalling $14.7 billion.
Goldman Sachs stated in a statement that it is following all regulatory and licensing standards. According to a source, the bank is now winding down its activities rather than immediately shutting them down. The credit exposure of Goldman Sachs to Russia is $650 million. In noon trading on Wednesday, its stock dipped 2.8 per cent to $325.97.
“We have been aggressively unwinding Russian business and have not been seeking any new business in Russia in conformity with directions from governments throughout the globe,” JPMorgan said in a statement. The bank went on to say that its present activities are limited since it is assisting worldwide clients with closing out pre-existing commitments, managing Russian-related risk, and acting as a custodian.
Meanwhile, Citigroup has indicated that its consumer business activities in Russia have been curtailed, and the bank is working on a strategy to exit the market. Citigroup is the US bank with the highest Russian exposure, with about $10 billion, and has already indicated that its losses might exceed half of that amount through a finance officer.
Goldman Sachs earned $19.5 million in investment banking income in 2021, according to Refinitiv statistics cited in the publication. JPMorgan came in second with $32.8 million, trailing only Russia’s VTB Capital. Citigroup had a profit of $22.8 million.
Russia has been subjected to increasing sanctions as a result of its involvement in the Ukraine conflict, limiting its access to the global financial system and digital assets. Several Russian institutions have been dropped from the SWIFT interbank communications system. Western Union, Paypal, Remitly, and Revolut, among other payment and remittance companies, have halted operations in the nation. Visa and Mastercard have likewise put a halt to their activities.
