Dive Brief:
- HSBC is in advanced talks to sell its Russia unit to Expobank, Bloomberg and the Financial Times reported Wednesday, citing people familiar with the matter.
- Expobank also emerged last week as one of at least three potential suitors for Citi’s Russia footprint.
- Britain’s largest lender counts $1.4 billion in assets in its Russia subsidiary and employed roughly 250 people there as of June 2021. HSBC pledged in April that it would not accept new business or customers in its Russia unit. The bank, however, did not fully commit to withdrawing from the country because of its responsibility to multinational corporate clients.
Dive Insight:
Expobank has a history of expanding by acquiring other lenders’ Russian presence. Expobank was Barclays’ Russia subsidiary until 2011, when Igor Kim bought it and grew the institution through acquisitions of Turkey-based Yapi Kredi and assets from what is now NatWest.
Kim said last year he would sell Expobank’s European assets. He’s followed through, in part — spinning off the bank’s Latvian subsidiary. Expobank also owns banks in the Czech Republic and Serbia.
HSBC has shrunk its Russia presence over the past decade. It opened retail operations in 2009 but shuttered it two years later to focus on corporate banking. HSBC took a $250 million charge in the first quarter of this year over its connection with Russian counterparties.
Spokespeople for HSBC and Expobank declined to comment to Bloomberg.
HSBC’s $1.4 billion in Russia-based assets would represent a fraction of Citi’s $13.5 billion for Expobank. Other private companies in the running for Citi’s Russia footprint, according to a Friday report from the Financial Times, include Rosbank — which once served as Société Générale’s Russian subsidiary — and insurer Reso-Garantia.
