HSBC, the largest bank in Europe, has transferred ownership of its Russian unit to Expobank. The deal, which was completed successfully, marks the end of two years of negotiations and uncertainty. The transfer of ownership comes after Russian President Vladimir Putin approved the asset sale to privately owned Expobank in February. HSBC confirmed that the economic ownership of its Russian unit has been transferred to Expobank, and the transaction will be formally completed once the legal title transfer is registered in the State Corporate Register.
The decision for HSBC to exit Russia was announced in June 2022 when the bank agreed to sell its 100% stake in HSBC Bank (RR) LLC to Expobank. This move was influenced by a 2022 decree that restricts investors from “unfriendly” countries, those that have imposed sanctions on Russia due to its actions in Ukraine, from selling shares in key energy projects and banks without explicit presidential approval.
Expobank has stated that the unit will continue to operate under a new, unspecified name. This transfer of ownership is part of a broader trend of European banks facing pressure from Washington and the European Central Bank to disengage from Russia. Raiffeisen Bank International of Austria is currently the largest European lender doing business in Russia, followed by Italy’s UniCredit. Additionally, Intesa Sanpaolo, another major Italian lender, is also working on disposing of its Russian business.
HSBC announced in September 2023 that it would halt commercial payments between business customers in Russia and Belarus due to increasing challenges posed by sanctions. Since then, HSBC has been downsizing its already small Russian unit. The unit had a revenue of approximately $15 million, a fraction of HSBC’s group revenue of over $50 billion, and employed around 200 people before the conflict in Ukraine.
It is worth noting that Expobank itself was sanctioned by the United States in December as part of broader restrictions targeting Moscow’s energy and financial sectors following Russia’s military intervention in Ukraine in February 2022.
