HSBC plans to close deal on sale of Russian business in Q2

MOSCOW. May 2 (Interfax) - The British HSBC plans to close a deal to sell its Russian business in the second quarter of this year, the bank's IFRS financial report said.

HSBC announced in July 2022 that it had signed an agreement to sell 100% of its subsidiary to Expobank. The deal was delayed due to the need to obtain approval from Russian regulatory authorities. However, Expobank was included in the sanctions list of the US Treasury in December 2023, which clouded prospects for the sale of HSBC bank, and at the time, there was no approval from Russian regulators, so HSBC stopped classifying its Russian business as an asset being held for sale.

The deal finally received the approval of the Russian President in February 2024. In a corresponding order, Vladimir Putin allowed Expobank to buy the Russian subsidiary of HSBC. The parties did not comment on the further prospects for closing the deal.

Following government and regulatory approval, HSBC reclassified the subsidiary bank as an asset being held for sale in Q1 2024, it said in its financial report.

"The transaction is expected to close in the second quarter of 2024. The income statement will include a foreign currency translation loss of approximately $0.1 billion," HSBC said.

HSBC Group's operations in Russia are primarily related to corporate banking services, including lending and investment banking.

Expobank is owned by Russian businessman Igor Kim. The bank specializes in lending to medium and large businesses, issuing car loans, and issuing bank guarantees and securities transactions. The US Treasury imposed sanctions on the bank last December. Expobank ranked 43rd in terms of assets in the Interfax-100 ranking at the end of 2023.