Bank of Cyprus Spearheads Major Retreat of Global Banks from Russia as Sanctions Bite and Trade Collapses

The largest Cypriot financial institution, Bank of Cyprus, decisively shuttered its offices in Moscow and Saint Petersburg, marking a significant retreat from the Russian market. These foreign bank branches, now barred from executing critical banking functions such as account openings, client fund solicitations, transfers, and foreign exchange transactions, are essentially isolated.

Functioning as independent legal entities, they nonetheless serve as extensions of their parent credit organizations’ interests, yet their operational scope has been dramatically curtailed.

Since the dawn of 2024, this closure represents the third such instance of a foreign bank’s retreat from Russia, slashing the total number of foreign bank presences in the country to a mere 23, down from 37 at the start of 2022. The onset of the war in Ukraine catalyzed this exodus, with nine closures in 2022, three in 2023, and an additional three since the beginning of 2024, only partially offset by the solitary opening of Kyrgyzstan’s “Ail Bank.”

This significant downsizing of Western banks’ operations in Russia stems directly from escalating sanctions, a substantial exodus of foreign businesses, and a sharp contraction in trade. According to data from Raiffeisenbank International, as reported by Bloomberg, the assets of foreign credit organizations in Russia plummeted to a mere $66 billion by the end of 2023. This figure represents a drastic halving from the $119 billion recorded in 2021 and is nearly a quarter of the $239 billion witnessed in 2012, signaling a profound and rapid decline in foreign financial engagement in the Russian market.

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