BNP Paribas and Crédit Agricole pull out of Russia

BNP Paribas and Crédit Agricole are to end all their business operations in Russia, becoming the latest international banks to sever ties with corporate clients in the country after its invasion of Ukraine.

BNP, which had already said it would halt new financing deals, said on Tuesday it would stop processing other types of transactions. French peer Crédit Agricole, which similarly only has investment banking activities in Russia, later said it would also halt all commercial activity there.

The lenders said they were now informing Russian clients.

Their decision highlights the contrasting approaches of banks to the crisis, with some grappling with how to continue to run their local Russian operations and others leaving.

Other Wall Street and European investment banks, including Goldman Sachs, JPMorgan and Deutsche Bank, have already said they will leave, although they have not yet said what this will involve.

BNP, the eurozone’s biggest bank, declined to comment on what would happen to its roughly 500 staff in Russia. Crédit Agricole has 170 staff in the country. Some companies, including carmakers that have frozen production and retailers that have shut stores, have continued to pay local employees after suspending their Russian activities.

Those with mainly foreign staff have in many cases repatriated them or moved them to other countries.

France’s Société Générale is among the foreign banks with the biggest exposure to Russia through its Rosbank retail bank, which employs 12,000 people. It has not explained its long-term plans but has maintained the business so far and warned of extreme scenarios such as a potential expropriation of its assets.

Other banks with Russian subsidiaries, such as Italy’s UniCredit and Austria’s Raiffeisen, have said they are considering exits but, with few prospective buyers for their businesses, options include winding them down.

There has been mounting pressure on companies to cut ties with Russia since the war started and Ukrainian president Volodymyr Zelensky has called on foreign businesses to withdraw.

BNP operates a retail bank in Ukraine, Ukrsibbank, and has previously revealed an exposure of €3bn to Ukraine and Russia, which it said amounted to 0.16 per cent of its total. Crédit Agricole has said the two countries make up 0.45 per cent of its total commercial commitments.

Source: Financial Times