Deutsche Bank is winding down its remaining software technology centres in Moscow and St Petersburg as Germany’s largest lender ends two decades of heavy reliance on Russian IT expertise in the wake of the country’s invasion of Ukraine.
The Frankfurt-based bank has offered individual severance packages to the 500 IT experts still left on the payroll in Russia, people familiar with the matter told the Financial Times.
At the start of the war Deutsche Bank employed 1,500 people in its Russian technology centre, who were responsible for developing and maintaining software for its global trading business and main corporate banking system.
Last year, it quietly relocated some 700 of them to a new technology centre in Berlin. Those left have now been offered voluntary redundancy packages that can be taken up within half a year, the people said.
Deutsche Bank has not yet made the formal decision to completely shut down its IT operations in Russia but that step is considered a done deal internally, according to the people. However this will add more time on top of the six month redundancy window, they added.
“We continue to de-risk our operations in the Russia Technology Centre and have expanded the options available to our employees to include leaving by mutual agreement alongside relocation and remaining on the platform,” the bank said in a statement, adding that the process was “in full compliance with relevant Russian legislation”.
Deutsche Bank has relied on Russian IT expertise since 2001 and the division had become increasingly important over the past decade as the bank started a process of “nearshoring” IT capabilities closer to Germany to cut costs. Just before Russia invaded Ukraine in February last year, a quarter of its investment bank IT specialists worked in either Moscow or St Petersburg.
The German group subsequently offered all its staff in Russia the option of transferring their jobs to Germany. Almost half of them took up the offer, and as many employees relocated with their partners and children, some 2,000 individuals moved.
Those left in Russia have been cut off from direct access to any Deutsche Bank IT systems, with their main task becoming “knowledge transfer” to colleagues outside of Russia. As this process is coming to a close, and with western sanctions against limiting the availability of software in the country, the bank now wants to shed its remaining staff in Russia over the coming six months.
Deutsche Bank last year cut its net loan exposure to Russia by 36 per cent to €379mn and said that it “remains committed to further exposure reductions”. The group had already closed large parts of its investment banking activities in the country after it was fined hundreds of millions of euros by global regulators for conducting so-called mirror trades that helped launder $10bn out of Russia between 2011 and 2014.