Bank of New York Mellon has joined a growing list of banks that are scaling back operations in Russia in response to the country’s war in Ukraine.
The New York custody bank disclosed Thursday that it “has ceased new banking business in Russia and suspended investment management purchases of Russian securities.” In the meantime, BNY Mellon will continue doing business with “multinational clients” that depend on its “custody and record keeping services to manage their exposures,” it said in a regulatory filing.
The retreat will come at a cost. The bank said that it will likely lose approximately $100 million in revenue for the first quarter and another $80 million to $100 million in annual revenue going forward.
Analysts estimate that the anticipated first-quarter loss will amount to about 2.5% of BNY Mellon's total revenues for the period, which are projected to be in the $4 billion range.
The reduction in annual revenues is “manageable” — in the 0.5% to 0.6% range, based on an estimated $17.1 billion in core revenues for the year, RBC Capital Markets analyst Gerard Cassidy wrote Thursday in a research note.
Currently, BNY Mellon’s business in Russia makes up about 1% of the company’s total revenues, a company spokesperson said Friday in an email.
BNY Mellon’s decision to cease new business in Russia comes on the heels of similar moves by other big U.S. banks. JPMorgan Chase, Citigroup and Goldman Sachs have all said they are
In a
Citi, which had previously announced plans to exit the consumer retail business in Russia and 12 other countries, will now “expand the scope of that exit process to include other lines of business” because it wants to further reduce its exposure in Russia, Skyler wrote. Bloomberg also
Citi, which has about 3,000 employees in Russia, could take an earnings hit of