Brink’s Is Reviewing Russia-Related Transactions to Comply With U.S. Sanctions, CFO Says

Brink’s doesn’t serve VEB and Promsvyazbank—the two Russian banks that were sanctioned by the Treasury Department on Tuesday—but needs to examine transactions by other banks to make certain that VEB and Promsvyazbank don’t circumvent the sanctions.

Promsvyazbank finances Russia’s military and VEB is Russia’s development corporation.

“We have to [prevent] these banks [from] avoiding the sanctions by using another bank,” Mr. Domanico said, referring to VEB and Promsvyazbank. “The sanctions against the two banks have created this situation that we have to review every shipment in and out of Russia.”

“We have a very tight compliance procedure,” he said.

Brink’s declined to say how many transactions it is monitoring, for fear of retaliation by the Russian government. “We could become a political target and we don’t want that,” Mr. Domanico said.

The U.S., U.K. and European Union this week introduced a range of sanctions, including against Russian banks and other organizations, the country’s sovereign debt and individuals, following Russia’s attack on Ukraine.

The U.S. sanctions haven’t had an economic impact on Brink’s yet, according to Mr. Domanico. Some Western businesses, including big oil companies

BP

PLC, Exxon Mobil Corp. and

Shell

PLC, as well as brewer

Carlsberg

A/S and car manufacturer

Renault SA,

have substantial investments in Russia.

Overall, companies’ direct exposure to the country outside of the energy sector is limited,

Moody’s Investors Service

said Wednesday, referring to the portfolio of over 3,400 businesses it rates globally.

In Russia, Brink’s primarily ships precious metals, diamonds and jewelry using armored trucks, including between mines and refineries, the CFO said. Its business in the country is relatively small and is reported as part of its “rest of the world” category. That segment generated $750 million in revenue in 2021, up from $604 million a year earlier, according to the company’s fourth-quarter earnings report. Operating profit for that segment was $132 million in 2021, up from $117 million during the prior-year period.

Brink’s covers more than 80 regions in Russia and has been offering a full range of services since 2008, according to the website of its Russian subsidiary. The company generates less than 1% of its annual revenue in Russia, Mr. Domanico said. “Because we want to be global, we operate in Russia,” he said.

Brink’s serves customers in over 100 countries around the world, including in Ukraine, where it ships bank notes and precious metals. That business is “much, much smaller” than the company’s Russian operations, according to Mr. Domanico.

The Richmond, Va.-based company on Wednesday reported revenue of $4.2 billion in 2021, up 14% compared with 2020. Operating profit, at $355 million, rose 66% from last year.

Brink’s plans to focus on winning customers for new products this year, including a subscription-based cash-management tool and outsourced automated teller machine services for banks, Mr. Domanico said.

Analysts at

Goldman Sachs Group Inc.

said in a note to clients, “[Brink’s] is advancing its digital cash management strategy, or Strategy 2.0, which we believe will lead to stickier, higher growth and higher margin revenue streams.”

Brink’s is increasing its addressable market with the subscription-based cash-management tool, said

Tobey Sommer,

a managing director at Truist Securities, a financial-services firm. That will also help the company bring down its expenses and improve its routes, he said.

Write to Nina Trentmann at [email protected]