Business

Goldman exits Russia as Europe’s banks divest billions of dollars of exposure

FILE PHOTO: The Goldman Sachs logo can be seen on a pole above the floor of the New York Stock Exchange
FILE PHOTO: The Goldman Sachs logo is seen on a pole above the floor of the New York Stock Exchange September 11, 2013. REUTERS/Lucas Jackson/File Photo

March 10, 2022

By Lawrence White and Brenna Hughes Neghaiwi

LONDON (Reuters) – Goldman Sachs Group Inc on Thursday became the first US bank to pull out of Russia after its invasion of Ukraine, while Credit Suisse said it would have gross exposure to Russia of 1.6 billion Swiss by the end of 2021 francs ($1.73 billion).

Goldman Sachs, which has $650 million in lending exposure in Russia, said it will do business there, likely increasing pressure on competing lenders to follow suit.

Any casualties would be “insignificant,” according to a source familiar with the situation.[nL3N2VD3DU]

Western companies have pulled out of Russia en masse as the United States, European Union and Britain imposed sanctions aimed at cutting off Moscow’s access to the global financial system in response to the invasion of Ukraine.

Banks, insurers and asset managers, who rarely make political statements, have struggled to distance themselves from Russia and assess their risks as the conflict enters its third week.

Credit Suisse became the latest European bank to disclose the size of potential losses, including loans to wealthy clients and trade finance and investment banking exposures.

Italy’s UniCredit and France’s BNP Paribas have also disclosed billions in Russian risks. In extreme cases, banks could lose everything if Moscow seizes assets and sanctions render Russia-related securities worthless.

Deutsche Bank said its credit risk exposure to Russia and Ukraine was 2.9 billion euros and that it has further reduced its Russia exposure over the past two weeks.

Russia calls its actions in Ukraine a “special operation”.

While the potential losses at major European lenders aren’t big enough to threaten their stability, analysts and investors fear it could thwart their turnaround plans and halt payouts to shareholders.

The conflict may also have upended interest rate hike plans from the European Central Bank, whose policymakers are expected to go into a meeting on Thursday divided on how to proceed and wary of making mistakes.

BNP Paribas, meanwhile, has cut off its Russia-based employees from its internal computer systems to bolster its defenses against potential cyberattacks, in another sign of how the conflict is hitting Western financial institutions.

The French bank, believed to be the first major lender to lock employees in Moscow off its IT networks, has also put employees elsewhere on high alert to cyber threats emanating from Russia.

($1 = 0.9269 Swiss Francs)

(Reporting by Lawrence White and Brenna Hughes Neghaiwi; Additional reporting by Sinead Cruise and Toms Sims. Editing by Jane Merriman, Michelle Price and Nick Zieminski)

https://www.oann.com/europes-banks-reveal-billions-worth-of-russia-risk-as-sanctions-bite/?utm_source=rss&utm_medium=rss&utm_campaign=europes-banks-reveal-billions-worth-of-russia-risk-as-sanctions-bite Goldman exits Russia as Europe’s banks divest billions of dollars of exposure

DUSTIN JONES

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