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.”
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.