Deutsche Bank, a leading German financial services provider, has reportedly relocated hundreds of Russia-based employees to Berlin with their families. According to Financial News, there are almost 1,500 Russia-based people on the staff and half of them have accepted to be relocated.
The bank is yet to decide what will happen to the Russian center and its staff. The Russian center develops trading software and corporate banking systems. As a result of the invasion of Ukraine, Deutsche Bank announced in March that it was winding down its operations in the country.
Russian staff represented 5.0% of the bank’s internal and external technology workforces, and the bank had been stress-testing the capability of other locations to take over for Russian operations in the event of a stoppage. At the Berlin site, about 1,000 people will be employed. Additionally, the bank has technology centers in Bucharest, the US and Asia.
Bank's Exposure to Russia
In March, Deutsche Bank disclosed more details about its risk exposures to Russia and Ukraine. The financial services firm stated that it had substantially reduced its exposure to Russia and its local footprint since 2014, with further reductions in recent weeks amid the crisis. “Our direct exposures are currently very limited and tightly managed. Second- and third-order effects of the current situation, including sanctions and cybersecurity risk, are being carefully evaluated and monitored,” Stuart Lewis, the Chief Risk Officer and Member of the Management Board at Deutsche Bank, commented at that time.
Russia and Ukraine account for a very small portion of the bank’s overall loan portfolio, and the bank is protected by several risk mitigation measures. The Russian invasion of Ukraine has resulted in significant reductions in market risk exposure, which included offshore collateral and financial guarantees.
Taking into account guarantees and asset collateral, the net exposure to Russia was EUR 0.6 billion on 31 December 2021. At that time, Ukraine had a net loan exposure of EUR 42 million equal to EUR 0.6 billion gross.
