Deutsche Bank Under Heavy Criticism For Remaining In Russia As Others Left

March 11, 2022

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By Cristian Bustos. Originally published at ValueWalk.

Deutsche Bank AG (NYSE:DB) is under fire over the German giant’s decision to stay in Russia amid economic sanctions on the country stemming from the invasion of Ukraine. Other banks such as Goldman Sachs Group Inc (NYSE:GS) and JPMorgan Chase & Co (NYSE:JPM) have ceased operations.

Backlash

As reported by Reuters, Deutsche Bank has decided to remain in Russia arguing that leaving would go against company values and that it must support the operations of multinational companies in the country.

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Chief Executive Christian Sewing told his staff on a note Thursday: “We are often asked why we are not withdrawing completely from Russia. The answer is that this would go against our values. We have clients who cannot exit Russia overnight.”

Criticism arrived from several flanks, and activist investor Bill Browder said Deutsche Bank’s decision to stay “is completely at odds with the international business community and will create backlash, lost reputation, and business in the West.”

He told Reuters, “I would be surprised if they are able to maintain this position as the situation in Ukraine continues to deteriorate.”

Russian Ties

Anti-financial crime campaigner Fabio De Masi said the bank has links with some Russian billionaires who have faced sanctions in the past, and called for any criminal relationship to end.

This week, Deutsche Bank disclosed $3.2 billion in credit risk to the country, which includes a gross loan exposure of 1.4 billion euros, as reported by Reuters.

Chief financial officer James von Moltke told CNBC that the bank successfully managed financial risk at the beginning of the Ukraine invasion, and added that “the market will always react to a crisis and the scenarios that unfold and look at the downside scenarios first.”

“I think then, over time, we’re able to provide more information, we’re able to talk about our trajectory,” he said.

The bank’s trajectory in Russia has been marred with scandal, as the U.S. Department of Justice launched an investigation over the laundering of $10 billion out of the country, with a $700 million fine as a result.