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11 Mar, 2022 11:00

German financial giant defends decision to stay in Russia

Deutsche Bank says it has a duty to its clients in the country
German financial giant defends decision to stay in Russia

One of the world’s leading financial service providers, Deutsche Bank, said on Thursday it is not “practical” to close its Russian business, despite similar moves by major corporations seeking to distance themselves from the country over its military offensive in Ukraine. The announcement comes as many Western companies pause their Russian operations.

“We’re there to support our clients,” James von Moltke, the bank’s chief financial officer, told CNBC. “And so, for practical purposes, that isn’t an option that’s available to us. Nor would it be the right thing to do in terms of managing those client relationships and helping them to manage their situation,” he said.

Von Moltke added that the bank would be willing to reconsider its position should the situation escalate further and its clients in Russia, which are mostly multinationals, cease their operations in the country.

“Of course, we’ll need to look at how this situation evolves and consider our footprint in Russia as we gain some greater clarity as to the direction of travel here,” he said. “As that [client presence] diminishes, so too will our presence in Moscow.”

Von Moltke said that Deutsche had managed the market risk “quite successfully” in the war’s early days, and noted that it was working closely with clients to manage their response. According to him, the bank’s capital in its Moscow subsidiary had been “fully hedged” to manage currency risks.

“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.

On Thursday, Goldman Sachs said it was winding down its business in Russia, while earlier on Monday HSBC told staff to start ceasing their dealings with Russian banks.

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