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HSBC Completes Transfer of Russia Unit Ownership to Expobank
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After almost two years of negotiations, HSBC Holdings plc (HSBC - Free Report) has finally completed the sale of its Russia Unit to Expobank. The lender confirmed that it transferred the ownership of its Russia unit, HSBC Bank (RR) LLC, to Expobank for an undisclosed fee.
HSBC stated, “Economic ownership of HSBC Russia has been transferred to Expobank. The transaction will formally complete once the legal title transfer has been registered in the State Corporate Register.”
HSBC first announced its intention to sell 100% of its stake in the Russia unit to Expobank in June 2022.
Post the Russia-Ukraine conflict, many of the world’s top financial companies began either selling or reducing their businesses in Russia because Western sanctions made operating there increasingly difficult.
Since then, Moscow steadily tightened restrictions on foreign asset sales because of which, banks require the president’s approval for any deal.
This February, HSBC got the approval from Russia’s president Vladimir Putin to sell its Russia unit to Expobank.
In 2011, HSBC exited the retail banking business in Russia, post which, it only served corporate clients in the region.
By June 2021-end, HSBC’s Russia business was worth 89.9 billion rubles and employed nearly 250 people.
In 2023, HSBC said that it took a $300-million loss on the expected sale of its Russia business.
Since announcing its exit from Russia, HSBC has managed down the size of the already small unit.
Over the past six months, HSBC shares have gained 13.1% on the NYSE compared with the industry’s growth of 12.7%.
In April 2022, French bank, Societe Generale (SCGLY - Free Report) said that it was ceasing its banking and insurance activities in Russia. SCGLY also announced the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group’s Russia insurance subsidiaries to Interros Capital, the previous shareholder of Rosbank.
Then, in December 2023, it was noted that SCGLY could complete its exit from Russia by selling stakes in some of the country’s largest companies back to Rosbank. President Putin had approved an order to allow Rosbank to once again buy the Russian stakes from SCGLY.
Likewise, Citigroup (C - Free Report) has ended most of its institutional banking services in Russia. In April 2021, the company announced plans to sell its global consumer business in Russia and 12 other markets. Later, it broadened the scope of the planned exit to fold up other lines of business in the country. In 2022, Citigroup was negotiating with local buyers and privately owned Russian companies for the sale of its operations in Russia.
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HSBC Completes Transfer of Russia Unit Ownership to Expobank
After almost two years of negotiations, HSBC Holdings plc (HSBC - Free Report) has finally completed the sale of its Russia Unit to Expobank. The lender confirmed that it transferred the ownership of its Russia unit, HSBC Bank (RR) LLC, to Expobank for an undisclosed fee.
HSBC stated, “Economic ownership of HSBC Russia has been transferred to Expobank. The transaction will formally complete once the legal title transfer has been registered in the State Corporate Register.”
HSBC first announced its intention to sell 100% of its stake in the Russia unit to Expobank in June 2022.
Post the Russia-Ukraine conflict, many of the world’s top financial companies began either selling or reducing their businesses in Russia because Western sanctions made operating there increasingly difficult.
Since then, Moscow steadily tightened restrictions on foreign asset sales because of which, banks require the president’s approval for any deal.
This February, HSBC got the approval from Russia’s president Vladimir Putin to sell its Russia unit to Expobank.
In 2011, HSBC exited the retail banking business in Russia, post which, it only served corporate clients in the region.
By June 2021-end, HSBC’s Russia business was worth 89.9 billion rubles and employed nearly 250 people.
In 2023, HSBC said that it took a $300-million loss on the expected sale of its Russia business.
Since announcing its exit from Russia, HSBC has managed down the size of the already small unit.
Over the past six months, HSBC shares have gained 13.1% on the NYSE compared with the industry’s growth of 12.7%.
Image Source: Zacks Investment Research
Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Firms Exiting Russia
In April 2022, French bank, Societe Generale (SCGLY - Free Report) said that it was ceasing its banking and insurance activities in Russia. SCGLY also announced the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group’s Russia insurance subsidiaries to Interros Capital, the previous shareholder of Rosbank.
Then, in December 2023, it was noted that SCGLY could complete its exit from Russia by selling stakes in some of the country’s largest companies back to Rosbank. President Putin had approved an order to allow Rosbank to once again buy the Russian stakes from SCGLY.
Likewise, Citigroup (C - Free Report) has ended most of its institutional banking services in Russia. In April 2021, the company announced plans to sell its global consumer business in Russia and 12 other markets. Later, it broadened the scope of the planned exit to fold up other lines of business in the country. In 2022, Citigroup was negotiating with local buyers and privately owned Russian companies for the sale of its operations in Russia.