Nordea Will Exit Russia After Years of Cuts Targeting Risk
(Bloomberg) -- Nordea Bank Abp is winding down what’s left of its operations in Russia, after years spent cutting back its business there as part of a plan to minimize its risks.
The Helsinki-based bank had already axed its Russian retail business, but previously indicated it would keep some services open for corporate clients. Late on Thursday, it said its decision to focus on the Nordics entails the “closure and liquidation of Nordea Bank Russia.”
The biggest Nordic bank has spent the past half decade cutting thousands of jobs and shrinking its international presence in an effort to become a leaner, more profitable business. Its former chief executive officer, Casper von Koskull, had identified Russia as a market from which to retreat as part of a plan to “de-risk” the whole bank.
At the end of 2019, Nordea had about 500 million euros ($612 million) in corporate loans in Russia, down 43% from a year earlier. Nordea says its Russian office now has about 140 employees, down from an average of 335 last year.
Nordea’s focus on its core business has intensified under Frank Vang-Jensen, who became CEO last year. He accelerated von Koskull’s program of cuts, which had coincided with Russia being tied to a string of Nordic money laundering scandals. Nordea has also exited other markets it deems too risky, including leveraged buyouts and shipping loans.
The Russian unit is part of Nordea’s large corporates and institutions business, which is undergoing a major overhaul to put its capital to more profitable use.
Overall, international banks have scaled back their presence in Russia since 2014 amid weak economic growth and escalating sanctions imposed by the U.S. and the European Union.
Citigroup Inc. shifted most of its brokerage operations out of the country this year, while Morgan Stanley gave up its local banking license in 2019. Deutsche Bank AG and Credit Suisse Group AG are among others that have reduced their Russian presence.
Nordea’s international network still includes branches in Shanghai, Singapore, New York, Frankfurt and London, and it has asset-management operations in Luxembourg, Switzerland, Portugal and Chile, among others.
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