Goldman Sachs has been granted permission by Russian President Vladimir Putin to sell its operations in Russia to Balchug Capital, an Armenian investment company. This deal makes Goldman Sachs one of the few Western financial institutions to fully exit the Russian market, which has been largely cut off from international finance since Russia’s full-scale invasion of Ukraine.
The American bank has entered into a binding agreement to transfer its Russian subsidiary to Balchug Capital, a company managed by David Amaryan, a former hedge fund manager. Amaryan, who has been acquiring real estate assets in Russia since the invasion began, has also worked for financial giants like Citigroup Inc. and Troika Dialog, a Moscow-based investment bank.
The approval for this sale came directly from President Putin, who signed a decree authorising the transaction. This marks another move in a series of similar banking deals, as more Western banks find it increasingly difficult to operate in Russia amidst international sanctions. Recently, the Russian government also approved the sale of operations by other banks, including French bank Natixis and Dutch lender ING Groep NV.
Despite Russia’s continuing aggressive actions in Ukraine, some Western banks have continued operations there, either maintaining profitable businesses or holding significant investments. Citigroup, for instance, ceased offering institutional banking services in Russia but still has about $9 billion tied up in the country.
Goldman Sachs has been operating in Russia since 1998, and its subsidiary was ranked 230th in terms of assets among Russian banks. The bank’s exit, though symbolic of the broader trend of Western companies pulling out, comes after significant international pressure on Russia due to its illegal invasion of Ukraine.
Balchug Capital, which now owns Goldman Sachs’ Russian unit, has assured that the deal adheres to all local and international laws, as well as sanctions regulations.
In addition to Goldman Sachs, Raiffeisen Bank, another major Western financial institution, has announced significant reductions in its operations in Russia, in line with European Central Bank requirements. The bank has ceased offering term deposits, lowered interest on accounts, and limited its credit and payment services.
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