Matt Scuffham and David Henry

NEW YORK, (Reuters) – Several Wall Street banks plan to keep a small presence in Russia and hold on to their licenses for banking in Russia in the foreseeable future. This is despite the fact that they are closing down other operations in Russia, according sources.

Citigroup Inc (NYSE:), JPMorgan Chase & Co (NYSE:) and Goldman Sachs Group Inc (NYSE:), the Wall Street bank with the largest Russian exposures, has stated in recent days that it plans to withdraw its businesses from Russia after the invasion of Ukraine.

Sources say that the banks will still have personnel and operations in the field as they attempt to release themselves from contractual obligations.

Sources at two banks indicated that even after the work has been completed, the bank license holders will likely continue to hold onto their licences to operate banks in the hopes that businesses can be rebuilt later.

Eric Schiffer (CEO at Patriarch Organization in California) said that “they aren’t going to cut-and-run when there are possible opportunities when this gets solved.” He is also a specialist on risk management strategy.

Experts believe that total withdrawal, which includes handing back licenses to the bank, could be difficult to get back. Experts say it is difficult and time-consuming to obtain a Russian banking license. Global banks often choose to purchase a share in Russian banks that have a license.

Citigroup announced Monday that it will increase its withdrawal from Russia, and it won’t take on any new clients, as it continues to reduce its exposure in the country. This raises the possibility of it taking billions in losses.

Before the invasion, the bank planned to sell its Russian consumer businesses. The bank has decided to increase that exit and include additional businesses, as well as to decrease its exposures and operations.

Russia describes its actions in Ukraine as a “special operations.”

BANCKS TO RETENDER LICENSES

Citigroup is the bank that has most to lose from U.S. banks pulling out. Citigroup has an exposure in Russia of close to $10 billion. This is higher than any U.S. bank and it has threatened that it might lose almost half in the worst-case scenario.

According to the bank, it would take some time for its withdrawals to be processed. The bank also reiterated its commitment to provide assistance to multinational corporations that are facing the difficult task of unwinding operations.

According to an insider familiar with the matter, Citigroup will likely continue operations in Russia and keep its Russian banking license for the near future.

Citigroup refused to comment.

Goldman Sachs stated last week that Russia is its “wind down” in accordance with the regulatory and licensing requirements.

According to a source, the bank does not have any plans at the moment to return its Russian banking license.

JPMorgan last week stated that it was actively dismantling its Russia business and not seeking new customers.

According to sources, the bank does not plan on revocation of its license as a Russian banker.

Deutsche Bank (DE) – The firm, which has been criticised by some politicians and investors because of its continued ties to Russia’s, declared Friday that it would close down all business operations there, in a change to an earlier commitment to stay.

Sources familiar with the matter claim that it plans to retain its Russian banking license for the near future.

According to sources, JPMorgan’s and Citigroup’s Russian securities custodians respectively, this is preventing them from making immediate withdrawals. This means that they are required to keep securities in Russia for their clients. The sources stated that there is no way to get out of these obligations due to restrictions imposed by Bank of Russia on securities transactions.

JPMorgan and Citigroup have also established Russian treasury and transaction services companies. These services include trade and financial services, cash management and financing for multinational corporations doing business in Russia. Sources at the banks indicated that these services would continue even if companies decide to suspend their operations or to unwind them.

Last week, Reuters said that banks face a long withdrawal process that could last years.

Some experts agree, however, that slowing down can have its benefits. This allows banks to change their approach and rebuild, if necessary, depending on the geopolitical environment.

This would be impossible if the Russians had decided to leave Russia completely, which could have been seen as hurting Russian citizens.

“There may be a long-term strategy that you don’t tarnish the name of the company too much in Russia to the point where Russia will boycott you,” said Antonia Tzinova, an attorney in global law firm Holland & Knight’s Washington, D.C., office.