By Mauro Orru
Russian President Vladimir Putin signed a decree allowing HSBC Holdings to sell its business in the country to local lender Expobank, marking what could be another departure from corporate Russia almost two years after the invasion of Ukraine.
The decree, signed on Monday, enables Expobank to acquire 100% of shares in HSBC Bank (RR), the bank’s Russian business. HSBC declined to comment. Expobank didn’t respond to a request for comment.
HSBC has been reducing its Russian presence–which dates back to 1917–over the past decade. After the war began, HSBC said it wasn’t accepting new business or customers in the country, adding that its operations there were focused on supporting multinational corporate clients headquartered outside Russia.
The bank announced plans to sell its Russian subsidiary in 2022, with HSBC taking a $300 million hit on the expected transaction. Leaving the Russian market has been a tedious endeavor for many Western organizations following the invasion of Ukraine, after the Kremlin moved to tighten legislation and, in some cases, confiscate assets.
Last year, Moscow appointed Chechnya’s agriculture minister as the new head of Danone’s business in the country and tapped a Russian businessman to run Carlsberg’s operations there. The Kremlin has also intervened to seize Western assets in the energy sector, most recently stakes from Germany’s Wintershall Dea and Austria’s OMV in a joint venture that operates an oil, gas and condensate field in Western Siberia.
Russia decreed last year that the state can take temporary control of assets of companies or individuals from what the Kremlin calls “unfriendly” states. HSBC is based in London but earns most of its pretax profit in Asia, including in Hong Kong and mainland China.
The latest decree authorizing the Russian business sale comes just over a month after the Office of Foreign Assets Control under the U.S. Treasury sanctioned Expobank. The Treasury didn’t respond to a request for comment on whether the designation would affect the sale of HSBC’s Russian business.
Write to Mauro Orru at [email protected]
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