Moscow, Russia – Goldman Sachs has completed the sale of its Russian subsidiary to Balchug Capital, an Armenian investment firm, marking the culmination of the U.S. bank’s withdrawal from the Russian market. This move comes nearly three years after Goldman Sachs announced its intention to exit Russia following the country’s invasion of Ukraine in February 2022.
Background and Transaction Details
The sale to Balchug Capital was authorized by a decree from President Vladimir Putin, as reported by the Financial Times. The transaction’s financial terms have not been disclosed. Goldman Sachs had maintained a modest presence in Russia since 1998, focusing primarily on investment banking services. In the first nine months of 2024, the bank’s assets in Russia decreased by approximately 9% to 4.95 billion rubles, while liabilities dropped by 50% to 1.31 billion rubles. Despite these reductions, net profit saw significant growth, driven by increased interest income.
Balchug Capital’s Role
Balchug Capital, founded in 2010 by David Amaryan, has been active in acquiring assets from Western companies exiting Russia. Notably, the firm purchased Caterpillar’s Russian operations in 2024 and has acquired other significant properties from departing Western businesses. Operating from Armenia, Balchug Capital has leveraged its position to facilitate transactions between Western and Russian markets amidst geopolitical tensions. (ft.com)
Context of Western Banks Exiting Russia
Goldman Sachs’ exit aligns with a broader trend of Western financial institutions withdrawing from Russia due to geopolitical developments. Dutch lender ING recently announced its departure, incurring a €700 million loss in the process. However, some banks, such as Austria’s Raiffeisen, continue to navigate the complexities of exiting the Russian market. The Russian government has implemented stringent regulations on foreign asset sales, requiring state approval and imposing specific conditions on transactions.
This development underscores the ongoing challenges and strategic decisions faced by multinational corporations operating in regions with evolving geopolitical landscapes.