Goldman Sachs said Thursday that it is “winding down its business in Russia in compliance with regulatory and licensing requirements.” JPMorgan Chase, America’s largest bank, followed within hours, saying it was “actively unwinding” its Russian business.
The exits also come after a stampede of Western businesses out of just about every other sector of Russia’s economy, and as ratings agencies warn that a Russian debt default is imminent.
International banks are owed more than $121 billion by Russian entities, according to the Bank for International Settlements, which suspended Russia’s membership on Thursday. European banks have over $84 billion total claims, with France, Italy and Austria the most exposed, and US banks owed $14.7 billion.
Other banks with more to lose could soon follow Goldman Sachs and JPMorgan Chase out of Russia. Kremlin spokesperson Dmitry Peskov said Thursday that the economic situation in Russia is “absolutely unprecedented” and blamed the West for an “economic war.”
Fitch Ratings warned previously that “large western European banks’ asset quality will be pressured by the fallout from Russia’s invasion of Ukraine,” and that their operations also face increased risk as they race to comply with international sanctions.
The bank said it had almost $21 billion in exposure to Russia at the end of last year.
Societe Generale “has more than enough buffer to absorb the consequences of a potential extreme scenario, in which the group would be stripped of property rights to its banking assets in Russia,” it said.
Read More: Russia owes Western banks $120 billion. They won’t get it back