HSBC has finalised the transfer of ownership of its Russian division to Expobank, marking the conclusion of approximately two years of negotiations and uncertainty, both banks announced on Wednesday. The transaction, for which the fee remains undisclosed, follows HSBC's decision to exit the Russian market, a move that was set in motion in February when Russian President Vladimir Putin granted approval for the sale to Expobank.
Confirming the completion of the deal, Expobank stated that it has successfully acquired HSBC's Russian unit. HSBC, in turn, affirmed the transfer of economic ownership, with the formal completion pending the registration of legal title in the State Corporate Register. The initial announcement of the agreement, wherein HSBC agreed to sell its entire stake in HSBC Bank (RR) LLC to Expobank, was made in June 2022.
Under a 2022 decree, investors from countries deemed "unfriendly" to Russia, due to sanctions imposed over actions in Ukraine, are required to obtain explicit presidential approval for selling shares in significant energy projects and banks. Expobank plans to continue operating the unit under a new name, although the specifics were not disclosed.
European banks, facing mounting pressure from entities like Washington and the European Central Bank, have been urged to withdraw from Russian operations. Raiffeisen Bank International of Austria currently holds the largest European presence in Russia, followed by Italy's UniCredit. Intesa Sanpaolo, another major Italian bank, is also in the process of divesting its Russian business, having received approval from Putin in September 2023, albeit facing delays attributed to bureaucratic procedures.
HSBC, Europe's largest bank, had announced in September 2023 that it would cease commercial payments between business customers in Russia and Belarus due to increasing challenges posed by sanctions. Since announcing its departure from Russia, HSBC has downscaled its operations in the region. The Russian unit, which had generated approximately USD 15 million in revenue, accounted for a small fraction of HSBC's overall revenue, which exceeds USD 50 billion. Prior to the Ukraine conflict, the unit employed around 200 individuals, according to HSBC's former finance chief Ewen Stevenson.
Expobank, however, faces its own challenges, having been sanctioned by the United States in December, as part of broader measures aimed at curbing Moscow's energy and financial sectors following Russia's military intervention in Ukraine in February 2022.
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