BNY Mellon expects to lose roughly $100 million in the first quarter of 2022 — and could see another $80 million to $100 million in lost revenue this year — as it halts new banking business in Russia and suspends investment management purchases of Russian securities, the bank said in a statement Thursday.
“We will continue to work with multinational clients that depend on our custody and record keeping services to manage their exposures,” Garrett Marquis, the bank’s global head of external communications, told Banking Dive in a statement.
The bank will no longer offer corporate-trust services — where banks make transactions on behalf of clients — in Russia, according to the Financial Times. Nor will it offer direct lending to companies in Russia, treasury services to help companies manage their liquidity needs, or depository receipt services, used by foreign issuers on a stock exchange to list securities.
The hit of up to $200 million may not be overly disruptive for BNY Mellon, the world’s largest custody bank, which reported $15.9 billion in revenue for 2021. It holds and manages $46.7 trillion in assets.
With Thursday’s move, BNY Mellon joins Goldman Sachs, JPMorgan Chase and Citi among U.S.-based systemically important financial institutions pulling back on their Russia business since the country invaded Ukraine late last month.
Deutsche Bank, which initially said "withdrawing completely from Russia ... would go against our values,” reversed course last Friday, saying it is “in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations.”
The cost to BNY Mellon of aligning with Western sanctions against Russia pales in comparison to the more than $4 billion Citi said it risks from its ties to the country, in a worst-case scenario.
