A slew of companies have announced plans to stop business in Russia over the last several weeks, and many of them are now sharing what those decisions may cost them.
Some companies had limited exposure to Russia and signaled that the expected losses were not significant. JPMorgan Chase’s chief executive, Jamie Dimon, told shareholders that the bank wasn’t “worried” about the impacts from leaving Russia. For industry giants like Shell, the financial hit — while large — accounts for just a small fraction of their profits.
Ericsson, the Swedish telecommunications company, said it was setting aside about $95 million for the first quarter to account for the expected financial hit from leaving Russia. On Monday it announced it was pulling out of the country after having already stopped deliveries to customers in Russia in late February. Nokia, its rival in Finland, said its own decision to leave Russia would lead to about $109 million in provisions for the quarter.
Here are some of the expected impacts that companies have disclosed:
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BNY Mellon said it might lose as much as $200 million in revenue — about $100 million this quarter and an additional $80 million to $100 million over the rest of the year. It has ceased new business with Russia and “suspended investment management purchases of Russian securities,” a spokesman for the company said.
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Ericsson said it was setting aside about $95 million in anticipation of the financial hit from leaving Russia. The company announced in April that it was exiting the country after having stopped deliveries to customers in Russia in February.
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Mr. Dimon said in an annual letter to JPMorgan shareholders that the bank could lose $1 billion “over time” because of its exposure to Russia. Last month, the bank announced that it was winding down business in Russia and would not pursue new ventures there.
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Nokia said it expected its decision to leave Russia to lead to about $109 million in provisions for the quarter. The company announced Tuesday that it was exiting Russia because of the invasion. It had already suspended deliveries, stopped new business and begun moving research and development work out of the country.
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Shell said in an update to shareholders that its decision to leave Russia would cost the company $4 billion to $5 billion in this quarter alone. The oil giant began cutting ties with Russia in February and said last month that it would stop buying oil and gas from Russia and shutter its service stations in the country in a “phased withdrawal.”
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Société Générale said it would take a financial hit of $3.3 billion in a deal to sell the company’s controlling stake in Rosbank, a Moscow-based lender, to Interros Capital.
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Volvo said it was setting aside about $423 million to make up for losses it anticipated in the first quarter because of Russian exposure. The carmaker has suspended “all sales,S&P Global has placed Russia under a “selective default” rating after the Russian government said last week that it had repaid about $650 million in dollar-denominated debt in rubles.
The ratings agency said late Friday that it didn’t expect investors to be able to convert the ruble payments into U.S. dollars that were equivalent to the original amount due, pushing Russia toward its first default on foreign currency sovereign debt in more than a century.
The bonds do have a 30-day grace period, giving the Russian government time to repay in dollars or find some other way to avoid a default. S&P Global said it didn’t expect the government to convert the payments within the grace period.
“Sanctions on Russia are likely to be further increased in the coming weeks, hampering Russia’s willingness and technical abilities to honor the terms and conditions of its obligations to foreign debt holders,” the ratings agency said.
On April 4, a dollar-denominated Russian government bond matured and another coupon payment came due. That same day, the U.S. Treasury Department tightened its restrictions on Russian transactions in an effort to force Russia to choose between draining the dollar reserves it has on hand or using new revenue to avoid defaulting on its debt. The department blocked Russia from using dollars held in American banks for its bond payments, and the transactions weren’t completed by JPMorgan. Subsequently, the Russian finance ministry said it paid the debt in rubles.
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service and production” in the country, the company said.
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