MPs are urging major banks to shut their Moscow offices, after campaigners accused them of “quietly profiting” off their Russian operations while other industries sever ties with the country.
Some of the City’s largest lenders including JP Morgan, Deutsche Bank, HSBC and Credit Suisse collectively employ thousands of staff who offer banking services to large companies and wealthy clients doing business in Russia.
While banks have had to drop services for Russian businesses and oligarchs in line with EU, US and UK sanctions, MPs said lenders had a moral duty to exit the country to put further financial pressure on Moscow as the Russian military continues to assault Ukraine.
“It’s not particularly shocking to see that major City or European banks have a presence in Russia,” the senior Labour MP Dame Margaret Hodge said. “But what is shocking is that we have not heard from the banks what they plan to do about it.”
She said she recognised that financial institutions already had a “major role to play” in enforcing sanctions that are meant to cripple the Russian economy and force President Vladimir Putin to withdraw troops from Ukraine.
However, Hodge said banks should go further. “While they may not have to leave Russia yet according to the law, there is a moral dimension to this and I fully expect that these banks will do the right thing and start severing ties with Russia and the Russian economy.”
The comments will put further pressure on lenders to review their Russian footprint, regardless of the size of their local operations.
London-headquartered bank HSBC has about 200 staff in the country, while Wall Street lenders JP Morgan and Goldman Sachs have 160 and 80 local employees, respectively. Swiss bank Credit Suisse has 100 local staff, offering wealth management, investment banking and support services, while Deutsche Bank has approximately 1,700 employees in Russia.
The French lender Société Générale employs about 12,000 staff in the country through its Rosbank subsidiary, which offers retail banking, private banking for wealthy clients and investment banking services. US bank Citi refused to confirm staff numbers but its website says it has more than 500,000 retail customers and 3,000 corporate clients in Russia, with operations in 11 cities across the country.
The Liberal Democrat foreign affairs spokesperson, Layla Moran, joined Hodge in calling for a full 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 lifestyle of his oligarchs,” the MP added. “It’s time to cut Putin’s regime off for good. Western banks must pull out of Russia without delay.”
It comes as a string of consultancy groups start to rein in their Russian operations, including Accenture, which confirmed it was shutting down its 2,300-strong office as part of opposition to the Russian military’s assault on Ukraine.
Oil majors including Shell and BP have also pledged to exit joint ventures and offload their stakes in state energy firms in reaction to the conflict.
Becky Jarvis, a representative of the Bank on our Future campaign group, said it was “unconscionable that the west’s biggest banks have been quietly profiting off banking services in Russia, while even the fossil fuel majors, BP and Shell, have withdrawn their investments”.
BankTrack, another campaign group that monitors the financial sector, has also called for a “complete withdrawal” by international banks, saying it was likely to be the “best option to avoid contributing to the harms of this invasion”.
A BankTrack spokesperson added: “However, banks need to put the safety of their workers and their families first.
“This includes doing everything they can to ensure workers don’t face retaliatory action for joining demonstrations, for example, and making sure they consider the wider human rights impacts of any moves to disengage.”
All the banks mentioned in this article were contacted. Most declined to comment, but said they complied with international rules including sanctions.
Deutsche Bank added that most of its clients were “European or multinational corporates who are currently adapting their business activities in the country.
“We are monitoring the situation closely and may adapt our approach as appropriate. We have reduced our exposure to Russia significantly over recent years and the risks are well contained.”