HSBC takes $300M hit on Russia business sale, says deal on track for 2023

LONDON  – HSBC said it still expects to complete the sale of its Russia business in first-half 2023, in the most significant update on the progress of the deal since it said in July 2022 it had agreed to sell the unit to local lender Expobank.

Europe’s biggest bank has taken a $300 million loss on the expected sale of the business, HSBC said as it reported its annual results for 2022.

HSBC said in July last year the deal was pending approval from Russia’s government and regulators, shortly before Deputy Finance Minister Alexei Moiseev said Russia would block the sale of foreign banks’ Russian businesses.

The London-based lender reiterated on Tuesday that the deal is still pending regulatory approval, and gave no further update on the status of that process.

Many multinational corporations moved quickly to exit Russia following its invasion of Ukraine in February last year, but banks have been among the slower sectors to disentangle themselves amid concerns about what Russian law will permit. Moscow calls its action in Ukraine “a special operation”.

Credit Suisse last July was banned from disposing of shares in its Russian unit by a Moscow court which also ordered the seizure of 10 million euros ($10.7 million) from the Swiss bank.

HSBC’s operations 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 invasion, HSBC Chief Financial Officer Ewen Stevenson said at the time.

($1 = 0.9375 euros)