June 30, 2022

Deutsche Bank reprimanded over staying in Russia as others quit

Deutsche Bank reprimanded over staying in Russia as others quit

  • Deutsche CEO says in Russia to serve multinational customers
  • Deutsche CEO says exit ‘would go against our values’
  • Investors criticize Deutsche’s presence in Russia
  • Deutsche Bank said monitoring the situation, may adjust
  • 2021 CEO Pays 20%

FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE) It faced stinging criticism from some investors and politicians on Friday over its continuing ties with Russia after they said leaving would go against its values, as other banks cut ties with Russia.

Germany’s largest bank resisted pressure to sever ties after the Russian invasion of Ukraine, arguing that it needed the support of multinational companies operating in Russia.

Goldman Sachs (GS.N) JP Morgan Chase (JPM.N) On Thursday, it said they were dismantling their Russia business, becoming the first major US banks to exit after Moscow’s invasion of Ukraine and putting pressure on rivals to follow. read more,

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“They are often asked why we have not completely withdrawn from Russia. The answer is that this goes against our values,” CEO Christian Swing said in a note to Deutsche Bank. (DBKGn.DE) Thursday staff.

“We have clients who can’t get out of Russia overnight.”

Bill Browder, an investor who has spent years campaigning to expose corruption in Russia, said Deutsche Bank’s survival “is completely at odds with the international business community and will lead to a backlash and loss of reputation and business in the West.”

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

The criticism came as Russian forces pressing Kyiv were regrouping northwest of the Ukrainian capital and Britain said Moscow could now plan an attack on the city within days. Read more

Fabio de Masi, a former member of the Bundestag and a prominent activist against financial crime, said Deutsche Bank has close ties to the Russian elite, many of whom have faced sanctions, and that the relationship, as it involves Russian criminal activity, must end. .

‘watching’

Deutsche Bank said it has reduced its presence in Russia in recent years, but this week disclosed 2.9 billion euros of credit risk for the country. Read more

It also operates a technology center with about 1,500 employees in Russia and opened a new head office in Moscow in December, which it said at the time represented a “significant investment and commitment to the Russian market.”

Asked about criticism of its decision to stay, Deutsche Bank repeated a statement that it would comply with the sanctions and was “closely monitoring the situation”, adding that it may adjust its approach “as appropriate”.

“Not good enough with DB,” said Tim Ash, chief emerging markets strategist at BlueBay Asset Management.

“Deutsche Bank (DB) probably needs to take a fresh look at its ESG framework,” he said, referring to the ESG investment standards.

Russia has pushed Deutsche Bank in hot water in the past.

The US Department of Justice has been investigating the matter for years over the course of transactions that authorities said were used to launder $10 billion from Russia, which resulted in the German bank being fined nearly $700 million.

Deutsche Bank said on Friday that the Justice Department’s investigation was “ongoing”.

The row over Russia comes as Deutsche Bank disclosed in its annual report that it paid the sewing company 8.8 million euros ($9.68 million) in 2021, a 20% increase from the previous year.

Overall, the lender paid 14% more, or 2.1 billion euros, in bonuses for 2021, rewarding employees for the bank’s most profitable year in a decade.

(1 dollar = 0.9088 euros)

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Additional reporting by Tom Sims, John O’Donnell and Frank Sebelt; Additional reporting by Caroline Cohn; Editing by Miranda Murray, Jason Neely and Alexander Smith

Our criteria: Thomson Reuters Trust Principles.