Russia has unleashed an invasion of Ukraine after months of massing troops near its borders. The military action, ordered by Russian President Vladimir Putin on Feb. 24, amounts to a full-scale invasion, says Ukrainian President Volodymyr Zelenskyy.
Casualties are mounting on both sides. The repercussions are being felt beyond Europe as rising geopolitical risk and volatile energy and financial markets rock Asia.
Goldman Sachs Group Inc said on Thursday it was closing its operations in Russia. It is becoming the first major Wall Street bank to exit the country following Moscow’s invasion of Ukraine.
“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” the company said Thursday in an emailed statement. “We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the well-being of our people.”
The Wall Street powerhouse has maintained a presence in Russia in recent years, but the country doesn’t amount to a meaningful portion of its global banking business. At the end of 2021, the firm’s total credit exposure to Russia was $650 million, most of which was tied to non-sovereign counterparties or borrowers
Operating in Moscow has been increasingly difficult for Western financial institutions amid international sanctions against Russia and banks have been weighing whether to remain or leave. While European banks are the most highly exposed to the country, U.S. banks still have significant exposure. It’s totaling $14.7 billion according to Bank of International Settlements data.
A source familiar with the situation said Goldman would wind down the operations rather than exit them immediately. The loss due to the exit would be immaterial, the source said.
Shares of Goldman Sachs fell 1.5% to $328.58 in early trading. Up to the close of trading on Wednesday, GS had fallen 12.8% this year.
Other Banks
While Goldman is the first Wall Street firm to announce a departure, Citigroup Inc. said Wednesday that it’s assessing operations in the country.
It previously announced efforts to exit its consumer business there, and is now operating it “on a more limited basis given current circumstances and obligations,” Edward Skyler, executive vice president of global public affairs, said in a statement.
Other U.S. banks operating in Russia include JPMorgan (NYSE: JPM), which declined to comment on what its plans were.
In Europe, Austria’s Raiffeisen Bank International (RBI) is considering leaving Russia. Two people with knowledge of the matter told Reuters previously.
