Shares of Goldman Sachs (GS) are falling after the bank said it would end operations in Russia, becoming the first U.S. bank to do so. In its 2021 annual report, the bank reported it had $650 million in credit exposure to Russia.
"Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements," the bank told the New York Times.
The move puts pressure on other U.S. banks—which hold a combined $14.7 billion in Russian exposure–to act similarly. Citigroup (C), the U.S. bank with the biggest exposure to Russia, as well 3,000 employees in the country, said it would continue to assess its operations in the country, but have yet to announce a full withdrawal.
Financial institutions will find it increasingly difficult to operate in Russia, as more and more sanctions are assessed against the nation. In the latest move, the Bank of International Settlements removed the country from its system. This comes two weeks after Russia was removed from SWIFT.
McDonald's $50m Russia Hit
McDonald’s Corp.'s decision this week to close its 847 stores in Russia comes at a hefty price: $50 million a month, or about 5 to 6 cents per share.
The company’s chief financial officer called the situation “really challenging and complex.” McDonald’s runs 84% of its Russian locations itself, and said it will continue to pay all of its 62,000 staff and restaurant employees there.
The move came after calls for a boycott against McDonald’s and other brands with businesses in Russia. New York State’s Common Retirement Fund—one of the largest pension funds in the U.S.—warned the company in a letter that it would face “significant and growing legal, compliance, operational, human rights, and reputational risks” if it continued to run its Russia operations.
McDonald’s also owns 100% of its 108 Ukraine locations. Russia and Ukraine's combined operations represented about 2% of the company’s systemwide sales, roughly 9% of its revenue, and less than 3% of its operating income last year.
Despite the rally in U.S. stocks yesterday, McDonald’s (MCD) shares closed fractionally lower at $222. The stock is down about 16% so far this year.
TSA Extends Mask Mandate on Public Transportation
Travelers on airplanes, buses, and trains in the U.S. will be required to wear masks through April 18, the Transportation Security Administration said in a statement today.
The mandate, originally imposed Jan. 31, 2021, to halt the spread of the coronavirus, has been extended multiple times, with the most recent extension set to expire on March 18.
The TSA gave no explanation for the extension, which comes at a time when U.S. states are dropping mask requirements as Covid-19 cases drop. It may be seen as in-line with the Federal Aviation Administration's "Zero-Tolerance Policy" adopted last year as incidents involving unruly passengers jumped.