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Deutsche Bank has joined JPMorgan Chase and Goldman Sachs in winding down its business in Russia following the country’s invasion of Ukraine.
“We condemn in the strongest terms the Russian invasion of Ukraine and support the German government and its allies in defending our democracy and freedom,” the company said in a statement Friday afternoon. “Like some international partners, in accordance with our legal and regulatory obligations, we are in the process of winding down our remaining business in Russia, helping our overseas multinational clients scale down their operations. There will be no new business. in Russia.”
| Ticker | Security | past | Change | Change % |
|---|---|---|---|---|
| DB | DEUTSCHE BANK AG | 10.24 | -0.49 | -4.61% |
| GS | GOLDMAN SAX GROUP, INC. | 327.14 | -2.77 | -0.84% |
| JPM | JPMORGAN CHASE & CO. | 128.79 | -3.09 | -2.34% |
The move comes after Deutsche Bank CEO Christian Sewing earlier said in a blog post on Thursday that pulling out of Russia “is against our values.”
“We have clients who cannot leave Russia overnight. And, as far as possible, we will continue to support them during this difficult time, ”he added then.
GOLDMAN SACHS BECOMES FIRST Wall Street. COMPANY LEAVES RUSSIA
Since 2014, Deutsche Bank has significantly reduced its exposure to Russia and its local presence. The company noted that credit exposures in Russia and Ukraine represent a “very small portion” of the bank’s total loan portfolio, while exposure to market risk has been “significantly reduced”. before and after the Russian invasion.
Deutsche Bank has significantly reduced its presence in Russia and its local presence since 2014, and this reduction has continued over the past two weeks. (REUTERS/Wolfgang Rattay)
As of December 31, 2021, Deutsche Bank’s net credit exposure in Russia is EUR 0.6 billion (USD 657.9 million), including guarantees and collateral assets. The total credit risk is 1.4 billion euros (1.54 billion dollars), which is about 0.3% of the total loan portfolio. Meanwhile, Ukraine has a net credit risk of €42 million ($46.1 million) and a gross exposure of €0.6 billion.
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According to the bank, the vast majority of its derivatives in Russia have been redeemed, and the remainder do not represent “significant credit risk”. Offshore loans to counterparties linked to Russia as part of its asset management business were “adequately secured and the collateral is not linked to Russia.” Regarding its market presence in Russia and Ukraine, Deutsche Bank said its risk is “well contained” and that the bank is “moderately defensive”.
In addition, the bank said the operational risk associated with the potential closure of its technology center in Russia is also well contained, adding that it does not pose a “significant business continuity risk to the operation of Deutsche Bank’s global operations.” The center employs approximately 1,500 employees, representing approximately 5% of the company’s internal and external technology workforce.
“The bank considers production risk to be manageable and has stress tested the ability of its other technology centers around the world, including in Asia, to cover the development of a Russian service center,” Deutsche Bank added.