Vontobel severs business ties with Russia-based clients

Vontobel's headquarters is based in Zurich, Switzerland. © Keystone / Ennio Leanza

The Swiss private banking and investment group Vontobel has announced that it has terminated business with clients in Russia as a result of the war in Ukraine.

During the finance group’s general meeting of shareholders on Tuesday, Vontobel CEO Zeno Staub announcedExternal link that as a result of the war in Ukraine and the resulting international sanctions against Russia, Vontobel decided last year to terminate its business with clients who reside in Russia.

“Even if the proportion of assets under management entrusted to us by this client group is only very small in relation to our total volume of assets under management, this business decision has led to outflows of assets in wealth management as we deal with the relevant client relationships,” Staub declared.

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The CEO said he remained “cautiously optimistic” for the current financial year. The global downturn in prices is having an impact on the bank’s assets under management and revenues, he said.

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After some initial hesitation following Russia’s invasion of Ukraine in February 2022, Switzerland followed the European Union and introduced a series of sanctions against Russia.

On March 30, the Swiss government adopted a tenth package of sanctions against Russia but reiterated its wish to limit any unintended consequences on Swiss businesses.

Despite public and political pressure, the mass exodus of Western firms from Russia hasn’t materialised according to a recent study. 

A separate list compiled by Yale scholar Jeffrey Sonnenfeld in February revealed over 1,300 companies and organisations around the world, including 53 Swiss entities, which had cut business ties with Russia.

Many Swiss companies have taken a nuanced approach to the Russian market, it showed. Nine entities remain open in Russia with significantly downsized operations. They include banks UBS, Credit Suisse and Julius Bär, the logistics giant Kühne + Nagel, and the building materials manufacturer Sika.

The situation is reportedly difficult for the banks, in part because the Russian state has intervened: a court, for example, barred Credit Suisse from selling its two Russian subsidiaries.