MOSCOW (Reuters) -Russian President Vladimir Putin gave approval on Monday for HSBC to sell its Russian unit to privately-owned Expobank, paving the way for the British lender to extricate itself from the Russian market after months of negotiations.
HSBC said in June 2022 that it had agreed to sell a 100% stake in the unit, HSBC Bank (RR) LLC, to Expobank. Moscow has steadily tightened restrictions on foreign asset sales since then, with banks requiring Putin’s approval for any deal.
HSBC and Expobank did not immediately respond to emailed requests for comment.
Monday’s order said it was allowing Expobank to acquire 100% of the unit, owned by HSBC Europe BV.
The order cited an Aug. 5, 2022 decree signed by Putin, which banned investors from “unfriendly” countries – those that have sanctioned Russia over its actions in Ukraine – from selling shares in key energy projects and banks. That decree gave Putin the power to issue special waivers in certain cases for deals to go ahead.
HSBC, Europe’s biggest bank, whose global business spans China and the United States, said in September it would halt commercial payments by business customers to and from Russia and Belarus, with sanctions making it “increasingly challenging” to operate there.
Expobank was sanctioned by the United States in December, as part of wide-ranging restrictions aimed at throttling Moscow’s energy and financial sectors in the wake of Russia despatching its army to Ukraine in February 2022.
The U.S. Treasury said in December it was imposing sanctions on Expobank “for operating or having operated in the financial services sector of the Russian Federation economy”.
The impact of those sanctions on the deal remains to be seen.
Putin’s approval is no guarantee of a successful deal. Italian bank Intesa Sanpaolo secured Putin’s approval to sell or dispose of its assets in Russia in September 2023, but has not yet managed to finalise a transaction.
(Reporting by Elena Fabrichnaya and Alexander Marrow; editing by Mark Heinrich and Gareth Jones)
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