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Goldman Sachs Group Inc. GS-N said on Thursday it was closing its Russian business, becoming the first major U.S. bank to exit following Russia’s invasion of Ukraine and putting pressure on rivals to follow.

Operating in Russia has become increasingly difficult for Western financial institutions amid international sanctions against that country, and banks have been debating whether to remain.

While European banks are the most highly exposed to Russia, U.S. banks still have significant exposure, totalling US$14.7-billion, according to Bank of International Settlements data.

“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” the bank said in an e-mailed statement.

Goldman will wind down the operations rather than exit them immediately and any losses would be “immaterial,” according to a source familiar with the situation, speaking on condition of anonymity.

In the aftermath of Russia’s invasion last month of Ukraine, around half of Goldman Sachs employees in Moscow have moved or are moving to Dubai, three sources familiar with the matter said. The bank had around 80 staff members in Moscow.

Some of the relocated staff will be involved in the winding down, working with colleagues still in Moscow, the sources said.

Goldman’s Russia head is understood to be remaining in Moscow, one source said.

In its annual filing, the bank had disclosed a credit exposure to Russia of US$650-million.

Shares of Goldman Sachs fell 2.8 per cent to US$325.97 in midday trading. Up to the close of trading on Wednesday, GS had fallen 12.8 per cent this year.

The biggest exposed U.S. bank is Citigroup Inc., which said on Wednesday it was operating its Russian consumer business on a more limited basis while sticking with its previous plans to divest the franchise.

Citigroup has total Russian exposure of nearly US$10-billion and its chief financial officer has warned that in a “severe stress scenario” its loss might be half that.

Citigroup might be able to spread the pain of any Russia losses over several quarters by recording expenses to build reserves on some assets before the losses are final, said analyst David Hendler of Viola Risk Advisors.

“It might put pressure on earnings for the next couple of quarters,” Mr. Hendler said.

Other U.S. banks operating in Russia include JPMorgan, which declined to comment on what its plans were.

Goldman Sachs was seventh overall in generating investment banking income in Russia’s last year, with Russia’s VTB Capital top, JPMorgan second with US$32.8-million, Morgan Stanley fourth with US$27.3-million and Citigroup fifth with US$22.8-million. Goldman Sachs generated US$19.5-million last year, according to Refinitiv data.

In Europe, Austria’s Raiffeisen Bank International (RBI) is considering leaving Russia, two people with knowledge of the matter told Reuters previously.

Banks will find it hard to extricate themselves from the market, however, experts have said, with the process taking months or even years.

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