Report: Deutsche Bank To Close IT Operations in Russia

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Facts

• The Financial Times reported on Wednesday that Deutsche Bank is winding down its remaining software technology operations in Moscow and St. Petersburg, a move that will end its two decades of reliance on Russian IT expertise in the next six months.¹
• While Germany's biggest lender hasn't yet formalized the decision to completely shutter its IT operations in Russia, the move is reportedly a done deal internally.²
• A spokesman for the bank confirmed that it is looking for ways to minimize business disruption as well as to de-risk its operations in the country, as the European Central Bank has allegedly been pressuring lenders to cut risks related to Russia.³
• Opened in 2001, Deutsche's IT center in Russia had become increasingly important over the past decade as the bank started a process of “nearshoring” IT capabilities closer to Germany to cut costs.⁴
• However, in a surprise move last year, the German bank vowed to reduce its business in Russia as some investors and politicians criticized its relationship in the wake of the war in Ukraine.²
• At the outset of the war, Deutsche Bank employed 1.5K people in its Russian technology center. Last year it quietly relocated around 700 of them to a new Berlin center and has offered individual severance packages to the 500 IT experts still left on the payroll in Russia.⁴

Sources: ¹Al Jazeera, ²Reuters, ³Bloomberg and ⁴Ft.

Narratives

• Anti-Russia narrative, as provided by Db. Deutsche Bank has rightfully made multiple statements condemning Russia’s invasion of Ukraine and has been working to wind down its Russia-related activities. While completely shuttering all Russian business couldn't happen overnight, the bank has taken the necessary step to reduce its dealings and reliance on Russian technology.
• Pro-Russia narrative, as provided by Tass. Deutsche Bank has been waffling as it looks to comply with the West’s anti-Russian stance while maintaining its financial benefits from Russian technology. That’s why the German lender quietly offered to relocate hundreds of its Russian employees. Deutsche Bank wants to leave Russia, but it needs Russians to grow its technology center.

Predictions