Goldman Sachs receives permission to leave Russia

This marks the completion of the US bank’s withdrawal from the country nearly three years after its initial commitment to exit. The transaction, executed for an undisclosed sum, follows a challenging period for western banks seeking approval to dispose of their Russian assets. 

Since Russia launched its full-scale invasion of Ukraine in February 2022, financial institutions have encountered difficulties due to stringent regulations that require state approval and impose a cap of 50% of market value on deal pricing. In some cases, notably for banks and energy companies, final approval must come directly from President Vladimir Putin.

Regulatory environment and asset developments 

The decree formally finalises Goldman Sachs’ nearly 30-year presence in Russia, a period that began in 1998 and once included high-profile events, such as visits by prominent figures such as former US President George HW Bush. Despite its long history, Goldman Sachs maintained a relatively limited role in Russia, focusing on investment banking services while abstaining from retail operations. 

Recent financial data cited by the Financial Times indicates that over the first nine months of 2024, the bank’s assets in Russia decreased by about 9% from the same period in 2023. At the same time, liabilities dropped by 50%. An increase in net profit, attributed to lower operating costs and a more than fivefold rise in interest income has been noted. 

Balchug Capital, established in 2010 has completed several significant acquisitions of western businesses exiting Russia in recent years. Among its transactions, the firm purchased Caterpillar’s Russian assets in 2024 and, in the previous year, acquired both the Pulkovo Sky business centre in St. Petersburg from Finnish companies and the Metropolis shopping centre in northern Moscow from a group of US investors that included Morgan Stanley. 

The acquisition of Goldman Sachs’ operations by Balchug Capital was made possible under the current sanctions regime due to its Armenian base, which Moscow regards as more aligned with its interests compared to western jurisdictions. Since the onset of international sanctions following the invasion of Ukraine, Armenian financial institutions have increasingly served as intermediaries between western and Russian markets.