Barclays is closing its investment bank in Moscow just six weeks after British rival Royal Bank of Scotland (RBS) announced the sale of its Russian business.

Barclays is shuttering investment banking units in Russia, Australia, as well as Asian countries such as Indonesia and Thailand, as part of a review of global operations, according to Reuters, which cited an internal memo. And a senior source at Barclays in London confirmed to bne that the British bank is withdrawing from Russia. 

Barclays’ London-based spokesman Jon Laycock declined to comment. 

Barclays’ Russia chief executive Bob Foresman also confirmed that he is leaving the London-based lender. "I will be leaving Barclays in the near future and exploring other opportunities related to Russia and continuing my efforts to improve US-Russia relations," Foresman said in emailed comments to bne.

The senior Barclays source told bne that, "The main takeout is we will continue to cover key Russian corporate and financial institutions through dedicated London-based teams, closing our Moscow office".

As bne wrote in December, the departure of RBS had put the spotlight on the viability of Barclays and HSBC remaining in Russia. RBS, the UK's largest-taxpayer owned bank, said on December 1 it has agreed to sell its Russian operations to Expobank, a mid-sized lender which had previously acquired Barclays' Russian retail business. The sale for an undisclosed amount will close in spring 2016 pending regulatory approval.

Barclays, along with is UK rival HSBC and Spanish giant Santander, are among international lenders that abandoned consumer banking in Russia over the past four years as state-controlled Sberbank and VTB Group increased their market share.

Sanctions have paralysed capital markets in the past 18 months and foreign banks are having to ask themselves if they can afford to retain bricks and mortar in Moscow or whether to resort to the fly in-fly out model commonplace in the early part of the last decade.

Barclays keeps a swish Moscow office for its Barcap investment banking unit at the Four Winds Plaza hotel, just off Tverskaya Street, the main road leading to the Kremlin.

It is believed that the office is being run by a skeleton team of staff after roles were axed and some were relocated to London. Foresman, Russia's country head for Barclays, told bne IntelliNews a year ago that he was relocating to New York and would commute back and forth to Moscow.

Foresman, a former Renaissance Capital and Dresdner Kleinwort rainmaker, had great ambitions for Barclays to become the number one foreign investment bank in Russia. In 2010, Foresman told  Bloomberg News that Barclays would hire 100 personnel for its brokerage alone.

Barclays Capital, the bank's securities unit, was one of the four arrangers of Russia's first sovereign Eurobond since the government defaulted in 1998, but the bank never made progress beyond arranging debt deals in Russia. A small research team was hired and there was slow progress over the years in building up sales and trading capacity in Russia.

The retirement last year of Hans-Joerg Rudloff, the chairman of Barclays Capital and one of the foremost experts on Russia, also damped their ambitions. Rudloff, regarded as the father of the modern Eurobond market, had served on the board of oil giant Rosneft and had many connections throughout the public and private sector.

Barclays, along with UBS, was tapped in November by Alfa Bank to arrange investor calls ahead of a bond deal. It was also mandated for the $1bn Norilsk Nickel Eurobond in October in a deal which marked a revial in the Russian debt market. On both deals, it's highly likely their debt capital market bankers were working the phones out of London. 

In a statement to bne IntelliNews in December, spokesman Jon Laycock declined  "to comment on market speculation" regarding the bank's plans for its Russia business.

Tom King, CEO of Barclays, recently said the bank is constantly monitoring its geographies and is making adjustments. Speaking at a New York conference in September, King said it's important not to take the simplistic view that any geography or product "is all or nothing".

Herman Gref, the head of Russia's largest lender Sberbank, said in December the country is facing the biggest banking crisis in two decades. The economy is suffering from a combination of weak oil prices, sanctions and a ruble that's 35% weaker than it was a year ago.

The remaining foreign lenders still in Russia, including BNP Pariba, Raiffeisen and UniCredit, have all been cutting headcount, shutting branches and tightening costs. The rumour mill has it that Austria's Raiffeisen may yet sell it's profitable Russian business. 

A trading scandal led to the closure of Deutsche Bank's investment banking operation in Moscow in September and the loss of at least 200 jobs. Investigators from the US and European regulators are looking at the bank's use of so-called mirror-trading involving about $6bn of transactions over four years.

Vneshprombank, among Russia's 40 biggest lenders by assets, was the latest lender on January 21 to have its license revoked after it failed to comply with central bank regulation. The bank is the biggest to fall since Master Bank in November 2013.

The central bank said Vneshprombank's liabilities exceeded its assets by around 187.4bn rubles ($2.3bn), while the bank's management had conducted various types of operations to strip assets out for a long period of time.