HSBC has agreed to sell its Russia business to Expobank, signing a deal shortly before Moscow said it would move to block the sale of foreign banks’ Russian businesses in retaliation for restrictions imposed on its own lenders.
“Following a strategic review, HSBC has signed an agreement to sell 100% of its participating interests in HSBC Bank (RR) LLC to Expobank JSC,” a spokesperson for the bank told Reuters by email on Thursday.
Completion of the deal would represent HSBC’s formal exit from Russia but the bank said the transaction was still subject to regulatory approvals in Russia.
A spokesperson for Russia’s central bank said it had not received an application for approval for the sale of HSBC’s business.
“Therefore, the Bank of Russia is not currently studying the possibility of such a deal,” a spokesperson for the bank said.
Such approvals can be requested after a deal is signed, meaning there is often a gap between the announcement of a deal signing and the approval being sought and granted.
Expobank, a privately owned Russian bank, declined to comment on the deal.
Last week, Deputy Finance Minister Alexei Moiseev said Russia would block the sale of foreign banks’ Russian businesses while Russian banks abroad were also unable to function normally. It is unclear whether this policy could yet scupper HSBC’s plans.
Credit Suisse (CSGN.S) has been banned from disposing of shares in its Russian unit by a Moscow court which also ordered the seizure of 10 million euros ($10.2 million) from the Swiss bank after it failed to repay a loan to a sanctioned bank.
Russian divisions of other foreign banks have started looking for staff this month, Reuters reported on Thursday, filling roles left vacant when employees suddenly left the country.
HSBC’s business in Russia consisted of a corporate banking business which offered a range of lending and investment banking services to domestic and multinational customers.
It employed around 200 people on the eve of Russia’s Feb. 24 invasion of Ukraine, HSBC Chief Financial Officer Ewen Stevenson said at the time. Moscow refers to its actions as a “special military operation”.
The bank did not disclose its assets in the business but Stevenson said HSBC’s Russia revenue was around $15 million, out of group revenue of $50 billion.