Page 11 - bneMag April 2022 Russia living with sanctions

bne April 2022 Companies & Markets I 11
Goldman Sachs becomes first Wall Street bank to leave Russia
bne IntelliNews
Investment bank Goldman Sachs will close operations in Russia following the invasion of Ukraine and subsequent sanctions, the bank told clients in an email statement on March.
“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements.
We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the well-being of our people,” the statement said.
However, the bank will continue to act as a platform for clients to trade Russian corporate debt.
The various businesses of Goldman Sachs have had an active presence in the Russian market recently. It is the biggest bank for M&A and ECM underwriting, for example, according to research by financial markets platform Dealogic.
EU vows to cut Russian gas supply by two thirds within a year
bne IntelliNews
The EU has announced plans to cut Russian gas imports by two thirds within a single year in response to Moscow’s actions in Ukraine.
Russia is the bloc’s largest gas supplier, meeting around 40% of its gas consumption. In light of the Ukrainian conflict, however, the European Commission has published a plan to replace 100bn cubic metres of annual Russian supply, which reached 155 bcm in 2021. Furthermore, it is seeking the EU’s reliance on Russian gas completely “well before 2030.”
“The answer to this concern for our security lies in renewable energy and diversification of supply,” EU climate policy head
Goldman Sachs is one of the most active investment banks in Russia.
Earlier this year, the firm revealed that it had a credit exposure to Russia of around $650mn.
This follows news that the “Big Four” accountancy firms – EY, KPMG, PwC, and Deloitte – will cut ties with their Russian and Belarusian arms, disassociating themselves from a cumulative 15,000 employees.
Goldman Sachs cited regulatory and compliance difficulties for its exit, meaning it is likely that other Wall Street banks will follow suit. The scale of western companies quitting Russia since the start of the war in Ukraine is unprecedented: it is little short of a de-coupling of Russia’s market from
the global economy. Bloomberg Economics estimates that the Russian economy will shrink by 9% in 2022, but that figure is likely to increase as the exodus from Russian markets continues.
Frans Timmermans said in a statement. “It’s hard, bloody hard. But it’s possible.”
Gas supplies from countries like the US and Qatar could replace more than a third, or 60 bcm, of Russian supply. New wind and solar projects could replace a further 20 bcm of gas demand this year, and by tripling capacity by 2030, adding an extra 480 GW of wind and 420 GW of solar, the commission believes a reduction of 170 bcm of annual consumption could be achieved.
The Commission adds that if consumers turn down thermostats by just one degree Celsius, that could save
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