BNY Mellon, a New York bank that locates and holds assets for many major institutions, could lose as much as $200 million in revenue this year if it shuts down new operations in Russia and adheres to a series of sanctions imposed by Western countries to economy of the country.
The company, which holds and manages $46.7 trillion in assets for clients such as asset managers, has halted new operations in Russia and has “suspended purchases of Russian securities for investment management,” Garrett Marquis, a BNY Mellon spokesperson, said in a statement. a statement on Thursday. “We will continue to work with multinational clients who rely on our custody and administration services to manage their exposures.”
As a result, the bank expects to lose approximately $100 million in revenue this quarter. For the rest of the year, sales could fall another $80 million to $100 million, it estimated.
BNY Mellon, the largest so-called custodian bank, joins other US banking giants — including Citigroup, Goldman Sachs and JPMorgan Chase — who have said they will step back from Russia after the invasion of Ukraine led to swift and severe economic sanctions from the United States and its allies. Other global energy, retail and food companies have also shunned Russia since the start of the war.
Western banks had largely withdrawn from Russia in recent years, maintaining only limited activities to serve businesses there, after President Vladimir V. Putin’s annexation of Crimea in 2014 led to economic sanctions from Western countries. Still, disentangling ties with the Russian economy will be a complex task for financial companies due to the intertwining of world trade.
