Deutsche Bank to pull out of Russia, reversing course after backlash

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  • Deutsche CEO said exit ‘would go against our values’
  • Investors criticized Deutsche’s presence in Russia
  • CEO 2021 pays up to 20%

FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE), which has come under heavy criticism from some investors and politicians for its ongoing ties with Russia, announced in surprise on Friday that it would end its activities in the country.

Deutsche joins the ranks of Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), which were the first major US banks to exit after Moscow invaded Ukraine. These moves put pressure on rivals to follow. Read more .

Deutsche had resisted pressure to sever ties, arguing it should support multinational companies doing business in Russia.

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But on Friday night in Frankfurt, the bank abruptly backtracked.

“We are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients scale down their operations,” the bank said.

“There will be no new business in Russia,” Deutsche said.

A day earlier, Deutsche Bank chief executive Christian Sewing explained to staff why the bank was not stepping down.

“The answer is that it would go against our values,” he wrote. “We have customers who cannot leave Russia overnight.”

Bill Browder, an investor who has spent years campaigning to expose corruption in Russia, said keeping Deutsche Bank was “completely at odds with the international business community and would create backlash, loss of reputation and business in the West”.

“I would be surprised if they manage to maintain this position as the situation in Ukraine continues to deteriorate,” Browder told Reuters earlier on Friday.

The criticism came as Russian forces attacking Kiev regrouped northwest of the Ukrainian capital and Britain said Moscow could now plan an assault on the city within days. Read more

Fabio De Masi, a former member of the Bundestag and a prominent financial crime activist, said Deutsche Bank had close ties to Russia’s elite, many of whom faced sanctions, and that the relationship, when it involved business Russian criminal, had to end. .

‘MONITORING’

Deutsche Bank said it has reduced its Russian footprint in recent years. This week it disclosed 2.9 billion euros of credit risk for the country, and said the exposure was “very limited”. Read more

It also operates a technology center with around 1,500 employees in Russia and opened a new main office in Moscow in December, which it said at the time represented “a significant investment and commitment to the Russian market”.

Russia has landed Deutsche Bank in hot water in the past.

The US Department of Justice has been investigating deals for years that authorities say were used to launder $10 billion out of Russia, leading to the German bank being fined nearly $700 million. of dollars.

Deutsche Bank said on Friday that the DOJ investigation “would be ongoing.”

The row over Russia arose when Deutsche Bank revealed in its annual report that it had paid Sewing 8.8 million euros ($9.68 million) in 2021, a 20% increase from to the previous year.

Overall, the lender paid 14% more, or 2.1 billion euros, in bonuses for 2021, rewarding staff for the bank’s most profitable year in a decade.

($1 = 0.9088 euros)

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Reporting by Tom Sims, John O’Donnell and Frank Siebelt; additional reporting by Carolyn Cohn; edited by Miranda Murray, Jason Neely, Alexander Smith and Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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