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British MPs urge global banks to close Russian offices ‘without delay’ | Banking

MPs are urging big banks to close their offices in Moscow, after campaigners accused them of ‘quietly profiting’ from their Russian operations while other industries sever ties with the country.

Some of the city’s biggest lenders, including JP Morgan, Deutsche Bank, HSBC and Credit Suisse, collectively employ thousands of people who offer banking services to large corporations and wealthy customers doing business in Russia.

As banks had to drop their services for Russian businesses and oligarchs under EU, US and UK sanctions, MPs said lenders had a moral duty to leave the country for put additional financial pressure on Moscow as the Russian military continues to attack Ukraine.

“It’s not particularly shocking to see that the big City or European banks have a presence in Russia,” said Labor MP Dame Margaret Hodge. “But what is shocking is that we haven’t heard from the banks what they plan to do about this.”

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The brands that left Russia

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A number of companies have withdrawn their operations and services in Russia since its invasion of Ukraine. These include:

Retailers

  • Ikea has temporarily closed all stores and factories in Russia, affecting 15,000 workers. It closed its 17 outlets across Russia but said it would keep its Mega malls open.
  • H&M has temporarily suspended all sales in Russia. The company said stores in Ukraine have already been temporarily closed “due to the safety of customers and colleagues”.
  • JD Sports ceased all commercial activity in Russia on its branded websites and wholesale channels, adding that it represents less than 0.05% of its annual revenue.
  • Mango, the Spanish clothing retailer, has announced that it is temporarily closing its stores and online shopping site in Russia, as it monitors the situation in Ukraine “with sadness and concern”.
  • Nike said it was blocking Russian customers from buying online.
  • Adidas has suspended its partnership with the Russian Football Union.
  • Marks & Spencer has suspended shipments to the Russian operations of its Turkish franchisee. Operations ceased last week at its 10 stores in Ukraine, which employ 250 people. It has 48 stores in Russia and 1,200 employees, also through the franchisee.
  • Boohoo has halted sales in Russia and shut down its Russian shopping sites.
  • Asos has suspended sales in Russia. He said it was “neither practical nor fair to continue to trade in Russia”.

Travel

  • Airbnb has suspended all operations in Russia and Belarus. He also took bookings from people in both countries.
  • Expedia has stopped selling trips to and from Russia.

Car manufacturers

  • Volkswagen has halted vehicle production in Russia “until further notice”. Vehicle exports to Russia have also been halted “with immediate effect”, he added.
  • Toyota halted production at its plant in St. Petersburg, and imports of vehicles into the country also ceased indefinitely.
  • General Motors, Jaguar Land Rover and Renault have halted sales and operations in Russia. Mercedes-Benz announced that it would stop selling cars and vans to Russia, as did Aston Martin. Harley-Davidson has halted motorcycle shipments to Russia.

beverage industry

  • Diageo, the maker of Smirnoff vodka and Guinness, has suspended exports to Russia and Ukraine.
  • Coca-Cola HBC halted production at its bottling plant in Kiev and evacuated its employees.

Technology, Media and Entertainment

  • Apple has suspended sales in Russia.
  • Facebook owner Meta said it had stopped recommending Russian state media content to all Facebook users, with Instagram to follow.
  • Google suspended all advertising in Russia after the country’s internet regulator asked the company to stop running what it considered to be ads displaying false information about the Russian invasion of Ukraine.
  • Walt Disney Company suspends its release of films in Russia.
  • Netflix said it has no plans to distribute news, sports and entertainment channels from Russian state media.

Luxury Goods Companies

  • Burberry has halted all luxury goods shipments to Russia “due to operational issues”.

Manufacturing

  • JCB, the British construction equipment manufacturer, said it had suspended all operations, including the export of machinery and spare parts to the country.

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She said she recognized financial institutions already had a “major role to play” in enforcing sanctions intended to cripple the Russian economy and force President Vladimir Putin to withdraw his troops from Ukraine.

However, Hodge said banks should go further. “Although they are not yet forced to leave Russia by law, there is a moral dimension to this and I fully expect these banks to do the right thing and start cutting ties. with Russia and the Russian economy.”

The comments will put additional pressure on lenders to review their Russian footprint, regardless of the size of their local operations.

London-headquartered HSBC Bank has around 200 staff in the country, while Wall Street lenders JP Morgan and Goldman Sachs have 160 and 80 local staff, respectively. Swiss bank Credit Suisse has 100 local employees, offering wealth management, investment banking and support services, while Deutsche Bank has about 1,700 employees in Russia.

French lender Societe Generale employs around 12,000 people in the country through its subsidiary Rosbank, which offers retail banking, private banking for wealthy clients and investment banking. US bank Citi declined to confirm the headcount, but its website says it has more than 500,000 retail customers and 3,000 corporate customers in Russia, with operations in 11 cities across the country.

Liberal Democrat foreign affairs spokeswoman Layla Moran joined Hodge in calling for a complete withdrawal of international banks from Russia.

“For too long, too many Western companies have bent over backwards to help facilitate the Kremlin’s oppression, Putin’s war chest and the way of life of his oligarchs,” the MP added. “It is time to permanently cut Putin’s regime. Western banks must withdraw from Russia without delay.

It comes as a series of consulting groups begin to curb their operations in Russia, including Accenture, which has confirmed it is closing its 2,300-person office as part of its opposition to the military assault. Russian against Ukraine.

Oil majors, including Shell and BP, have also pledged to exit joint ventures and offload their stakes in state-owned energy companies in response to the conflict.

Becky Jarvis, a representative of the Bank on our Future campaign group, said it was “unconscionable that the biggest Western banks are quietly profiting from banking services in Russia, when even the fossil fuel majors BP and Shell have withdrawn their investments. .

BankTrack, another campaign group that monitors the financial sector, also called for a “complete withdrawal” from international banks, saying it was probably the “best option to avoid contributing to the damage of this invasion”.

A BankTrack spokesperson added: “However, banks must prioritize the safety of their employees and their families.

“This includes doing all they can to ensure that workers do not suffer retaliation for joining protests, for example, and ensuring that they consider the wider human rights impacts. of any attempt to disengage.”

All the banks mentioned in this article have been contacted. Most declined to comment, but said they abided by international rules, including sanctions.

Deutsche Bank added that most of its customers are “European or multinational companies that are currently adapting their business activities in the country.

“We are monitoring the situation closely and can adapt our approach if necessary. We have significantly reduced our exposure to Russia in recent years and the risks are well contained.