War in Ukraine: Leaving Russia Could Cost Companies Billions

Several companies have announced plans to suspend their business in Russia in recent weeks, and many of them are now revealing how much those decisions will cost them.

Some companies have limited exposure to Russia and have signaled that the expected losses were not significant. JPMorgan Chase Chief Executive Jamie Dimon told shareholders the bank was not “concerned” about the effect of leaving Russia. For industrial giants like Shell, the financial hit – albeit heavy – accounts for only a fraction of their overall profit.

On Monday, France’s third-largest bank Société Générale said it would suffer a $3.3 billion loss on the sale of its controlling stake in Rosbank, a based in Moscow, to Interros Capital. The transaction would allow the bank to “leave Russia in an effective and orderly manner, ensuring continuity for its employees and customers,” the company said.

Below are some of the effects that companies have announced that they should suffer:

• BNY Mellon announced that it could lose up to US$200 million (R$940 million) in revenue – around US$100 million (R$470 million) this quarter and between US$80 million (R$376 million) and US$ an additional 100 million over the remainder of the year. The bank stopped doing new business in Russia and “has suspended purchases of Russian bonds by our investment management division,” a company spokesman said.

• Dimon said in a letter to shareholders that JPMorgan Chase could lose $1 billion “over time” because of its exposure to Russia. Last month, the bank announced that it was ending its operations in Russia and that it would not pursue new ventures there.

• Shell released an update to shareholders that its decision to leave Russia had cost the company $4 billion to $5 billion this quarter alone. The oil giant began cutting ties with Russia in February and announced last month that it would stop buying Russian oil and natural gas and would close its gas stations in the country in a “phased withdrawal”.

• Société Générale announced it would suffer financial losses of $3.3 billion in the transaction to sell the company’s controlling stake in Rosbank, a Moscow-based bank, to Interros Capital.

• Volvo announced that it was building a reserve of US$423 million (R$1.9 billion) to offset losses it anticipated in the first quarter due to its exposure to Russia. The automaker has suspended “all sales, service and production” in the country, it announced.

Translation by Paulo Migliacci