HSBC has transferred ownership of its Russian unit to Expobank for an undisclosed fee, the two lenders said on Wednesday, ending around two years of negotiations and uncertainty.
HSBC’s exit from Russia has been on the cards since February, when Russian President Vladimir Putin gave approval for the asset sale to privately owned Expobank to go ahead.
Expobank said it had successfully completed the deal. HSBC later confirmed that it had transferred ownership of the business to the Russian lender.
“Economic ownership of HSBC Russia has been transferred to Expobank,” HSBC said in a statement. “The transaction will formally complete once the legal title transfer has been registered in the State Corporate Register.”
HSBC first announced in June 2022 that it had agreed to sell a 100% stake in the unit, HSBC Bank (RR) LLC, to Expobank.
A 2022 decree bans investors from “unfriendly” countries – those that have imposed sanctions on Russia over its actions in Ukraine – from selling shares in key energy projects and banks without explicit presidential approval.
Expobank said in a statement that the unit would continue to operate, but under a new, unspecified name.
European banks have been under growing pressure from Washington and the European Central Bank to extricate themselves from Russia. Austria’s Raiffeisen Bank International is the largest European lender doing business in Russia, followed by Italy’s UniCredit.
Another large Italian lender, Intesa Sanpaolo is working to dispose of its Russian business. It received Putin’s approval to exit in September 2023, but the deal has been held up by “bureaucratic steps”, its CEO said in February.
EXPOBANK SANCTIONS
HSBC, Europe’s biggest bank, said in September 2023 that it would halt commercial payments by business customers to and from Russia and Belarus, with sanctions making it “increasingly challenging” to operate there.
Since announcing its exit from Russia, HSBC has managed down the size of the already small unit.
HSBC previously told Reuters the Russian unit had revenue of about $15 million, out of group revenue of more than $50 billion. It employed about 200 people on the eve of the conflict in Ukraine, HSBC’s former finance chief Ewen Stevenson said at the time.
Expobank was sanctioned by the United States in December, as part of wide-ranging restrictions aimed at throttling Moscow’s energy and financial sectors in the wake of Russia despatching its army to Ukraine in February 2022.
Source: Reuters.com