Deutsche Bank said on Thursday it was “unreasonable” to close its Russian business, despite similar actions by large corporations seeking to distance themselves from the country due to its Ukraine invasion.
The chief financial officer of a German bank defended the decision, saying it relied on its duty to care for customers still operating in the country.
It comes as some big banks are taking steps to get out of Russia. In Wall Street’s first departure, Goldman Sachs said on Thursday he would close his business in the country, and HSBC on Monday told workers to stop working with Russian banks.
“We are here to support our customers. So, for practical purposes, that is not an option available to us. It would also not be a good thing to do to manage that customer relationship and help them manage their situation, ”said James von Moltke.
Von Moltke added that the bank would agree to reconsider its position if the political situation continued to escalate and its customers in Russia – especially various countries – stopped operating in the country.
“Yes, we will have to look at how this situation unfolded and consider our trail in Russia as we get more clarity about how to travel here,” he said.
“As that [client’s presence] diminishes, so will our presence in Moscow.”
Von Moltke did not name any bank clients in Russia.
It comes as the list of Western companies shutting down or suspending their operations in Russia is growing.
PepsiCo, Coca-Cola, McDonald’s and Starbucks all on Tuesday said they would suspend business in the country, joining a corporate league that had left the country following the attack by Russian President Vladimir Putin in Ukraine.
The sanctions on many Russian banks and other businesses, on the other hand, have made it difficult for companies to operate within the region.
Russia’s exposure is ‘very limited’
European bank shares have been on the rise since the Russian invasion, with markets wanting to balance their exposure to the crisis with the effect of Western sanctions.
Deutsche Bank, on the other hand, sought to reassure investors that its exposure to Russia was “very limited.”
In a statement issued Wednesday, the bank said that included Russia’s 1.4 billion euro ($ 1.55 billion) loan exposure, or 0.3% of its loan volume.
Von Moltke said the bank was able to manage market risk “very effectively” in the early days of the war, and noted that it was working closely with customers to manage their response.
He also added that the bank’s capital at its Moscow company is “completely fenced” to control financial risks.
“The market will always respond to the crisis and the situation and look at the worst situations first. I think, over time, we can provide more information, we can talk about our track, ”he said.
Deutsche Bank was previously burned in Russia. In 2015, it withdrew its investment business from the country following an investigation by Russian clients who may have been defrauding money.
Later, in 2017, it entered residential areas in the U.K. and in the US about the so-called mirror trade, which saw the bank transfer $ 10 billion to Russian clients abroad.