Goldman quits Russia while Europe’s banks reveal billions worth of exposures

LONDON, March 10 (Reuters) – Goldman Sachs Group Inc (GS.N) on Thursday became the first U.S. bank to withdraw from Russia following its invasion of Ukraine, while Credit Suisse (CSGN.S)said it had gross exposure to Russia of 1.6 billion Swiss francs ($1.73 billion) at end 2021.

Goldman Sachs, which has a credit exposure to Russia of $650 million, said it was winding down its business there, in a move that will likely increase pressure on rival lenders to follow.

Any losses would be “immaterial,” 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 its Ukraine invasion.

Banks, insurers and asset managers, which rarely make political statements, have scrambled to distance themselves from Russia and assess their exposures, as the conflict enters its third week. read more

Credit Suisse was the latest European bank to reveal the size of potential losses, which it said included lending to wealthy clients as well as trade finance and investment banking exposure. read more

Italy’s UniCredit (CRDI.MI) and France’s BNP Paribas (BNPP.PA) have also disclosed billions of euros worth of Russia risk. In an extreme scenario, banks could lose it all if Moscow seizes assets and sanctions render Russia-related securities worthless. read more

Deutsche Bank (DBKGn.DE) said its credit-risk exposure to Russia and Ukraine was 2.9 billion euros and that it had reduced its Russia exposure further over the past two weeks. read more

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

While the potential losses among major European lenders are not big enough to threaten their stability, analysts and investors fear it could derail their turnaround plans and halt payouts to shareholders. read more

The conflict has also potentially upended planned interest rate increases by the European Central Bank, with its policymakers expected to go into a meeting on Thursday divided as to how to proceed and wary of making mistakes. read more

BNP Paribas, meanwhile, has cut off its Russia-based workforce from its internal computer systems as it seeks to bolster its defences against any potential cyber attack, in another sign of how the conflict is hitting Western financial institutions.

The French bank, thought to be the first major lender to have shut staff in Moscow out of its IT networks, has also placed employees in other locations on high alert for cyber threats emanating from Russia. read more

($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

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