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In a first move for a major Wall Street player, Goldman Sachs announced it will be closing its operations in Russia.
The company reportedly said Thursday, “Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” adding, “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.”
According to Bloomberg, “While Goldman is exiting Russia, the firm is still trading corporate debt tied to the country without the bank itself making wagers on price movements, a representative said.”
“In our role as market-maker standing between buyers and sellers, we are helping our clients reduce their risk in Russian securities which trade in the secondary market, not seeking to speculate,” Goldman Sachs reportedly said in the statement.
The move might not be a huge financial change for the bank, although the pressure it could put on other banks to follow suit could make an impact.
According to The Wall Street Journal, last month, Goldman Sachs Group “said it had only about $1 billion [in] total exposures to Russia as of the end of the year, with about $650 million in outstanding credits and $415 million in markets. That makes it a relatively small market for the bank, which has $1.46 trillion in assets.”
Citigroup commented on its businesses dealings in Russia on Wednesday.
Edward Skyler, executive vice president of global public affairs, said in a statement, “We are continuing our previously announced efforts to exit our consumer banking business in Russia. As we work toward that exit, we are operating that business on a more limited basis given current circumstances and obligations.”
“We are also supporting our corporate clients in Russia, including many American and European multi-national corporations who we are helping as they suspend or unwind their business. With the Russian economy in the process of being disconnected from the global financial system as a consequence of the invasion, we continue to assess our operations in the country,” Skyler added.
According to Bloomberg, “The company is continuing its previously announced efforts to exit the consumer business in Russia, Skyler said. The bank has seen efforts to sell that business stall following the Ukraine invasion, with one problem being that potential suitors including Russian firms such as VTB Bank PJSC are now subject to sanctions imposed by the U.S. government.”
Citigroup has also assisted some of its 200 employees in Ukraine look for protection in Poland. It also gave Ukrainian employees advances on wages. “The company is the only U.S. bank with operations in Ukraine, where it’s had a presence for more than two decades,” Bloomberg reported.
“Our top priority remains the safety of our colleagues and their families,” Skyler noted. “We are proud of the members of the Citi family who have kept our bank operating despite the catastrophe unfolding around them.”
JPMorgan Chase & Co., which is the largest U.S. bank in assets, joined Goldman on Thursday.
“JPMorgan Chase & Co. is actively unwinding its Russia business,” per Bloomberg.
“Current activities are limited, including helping global clients address and close out pre-existing obligations; managing their Russian-related risk; acting as a custodian to our clients; and taking care of our employees,” JPMorgan said in a statement.
Companies have also recently announced their withdrawal from Russia over Russian President Vladimir Putin’s war on Ukraine.
On Tuesday, PepsiCo and Coca-Cola joined other companies in announcing they would be suspending business in Russia. McDonald’s also announced it would be temporarily shutting down 850 of its locations in Russia, pointing to “the needless human suffering unfolding in Ukraine.”
Yum Brands announced it would be suspending its development of restaurants and investment in the country. “The KFC owner has more than 1,000 restaurants in Russia that account for roughly 2% of its systemwide sales,” CNBC noted.
Starbucks also has around 130 locations throughout Russia and Ukraine that are wholly owned and operated by a licensed partner. On Tuesday, Starbucks CEO Kevin Johnson wrote that the company continues “to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products.”