Goldman Sachs becomes first Wall Street bank to leave Russia

Growing number of major US companies leaving Russia due to invasion of Ukraine

Goldman Sachs has chosen to close their business in Russia, becoming the first Wall Street bank to leave the country following the invasion of Ukraine.

“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” the bank said in a statement to multiple media outlets. “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 bank still facilitates debt securities trades connected to Russia, Bloomberg reported.

“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 said, according to CNBC.

The distance between Russia and western institutions is growing after businesses such as Apple, Google, Visa, Mastercard, McDonald’s, and Starbucks all announced that they are closing their operations in the country.

Russia, a country with the most land area in the world and with a population of more than 144 million, has an economy smaller than that of Italy or the state of Texas, according to their 2020 GDPs.

Many larger American banks had smaller Russian operations, with Citigroup filings showing they had the largest exposure at $9.8bn. Goldman’s exposure was estimated to be $940m, according to analysts at Bank of America.

Citigroup revealed plans to sell their Russia operation last year, long before the start of the invasion in February. But the invasion of Ukraine has prompted the company to make its Russian consumer banking operation “more limited” in scope.

This map shows the extent of Russia’s invasion of Ukraine (Press Association Images)

“We are continuing our previously announced efforts to exit our consumer banking business in Russia,” the bank said on Wednesday. “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.”

JPMorgan also announced on Thursday that they’re “unwinding” their operations in Russia. “In compliance with directives by governments around the world, we have been actively unwinding Russian business and have not been pursuing any new business in Russia,” spokesperson Tasha Pelio said, according to CNBC.

She added that the bank’s work in Russia is “limited” to “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”.

The bank has fewer than 200 members of staff in the area.

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