We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HSBC in Talks to Sell Russia Business, Joins Other Lenders
Read MoreHide Full Article
HSBC Holdings plc (HSBC - Free Report) is in talks to sell its Russia corporate lending business to Expobank. The discussions with Mr. Kim, the owner of Expobank, are likely to be at an advanced stage. The move comes when many of the world’s top financial companies are looking to either sell or reduce their business in Russia post the Russia-Ukraine conflict.
Expobank has not yet made any comment on the matter.
By June 2021-end, HSBC’s Russia business was worth 89.9 billion rubles and employed nearly 250 people, per Bloomberg, which was the first to report the talks, citing people familiar with the matter.
In 2011, HSBC exited the retail banking business in Russia. Now it only serves corporate clients in the region. Recently, HSBC said that it is suspending the addition of new customers to its existing Russian business, but the bank has so far stopped short of pulling out completely from Russia. Thus, it currently employs around 200 staff in the country.
Notably, with Russia’s economy being restricted from the global financial system due to its Ukraine invasion, numerous banks with a significant footprint in the country have eyed opportunities to exit Russia as western sanctions have made operating there increasingly difficult.
This April, French bank, Societe Generale (SCGLY - Free Report) , said that it is ceasing its banking and insurance activities in Russia. SCGLY also announced the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group’s Russia insurance subsidiaries to Interros Capital, the previous shareholder of Rosbank.
A couple of days ago, it was reported that Citigroup (C - Free Report) has been negotiating with local buyers and privately-owned Russian companies, including Expobank and insurance company Reso-Garantia, for the sale of its operations in Russia. Nonetheless, Citigroup will likely retain its license and maintain a stripped-down presence in the region.
While Citigroup announced plans in April 2021 to sell its global consumer business in Russia and other 12 markets, it has now broadened the scope of the planned exit and will fold up other lines of business in the country. This implies that Citigroup would also give up its institutional and wealth management business in Russia.
Other Restructuring and Expansion Efforts by HSBC
In an effort to restructure its operations to further improve operating efficiency, in February 2020, HSBC announced its transformation plan, aimed at reshaping underperforming businesses, simplifying complex organization and reducing costs. As part of this initiative, the company expects to incur $7 billion in charges and achieve at least $5.5 billion of cost savings by 2022-end.
Moreover, HSBC has been continuously undertaking measures to bolster its performance with special focus on building operations in Asia, including Hong Kong and China. In sync with this, the company acquired 100% of the issued share capital of AXA Insurance in Singapore for $529 million this February and agreed to acquire L&T Investment Management Limited.
Also, recently, the bank announced plans to re-launch its private banking business in India in a year. Since the country is experiencing a surge in the number of super-rich, HSBC has been exploring options of re-entering the market.
As part of a group strategy, HSBC exited India’s private banking business in 2015. However, in November 2021, Nuno Matos, the CEO of HSBC’s Wealth and Personal Banking division, said that the bank was exploring whether to re-enter onshore private banking in India.
Apart from these efforts, HSBC has also started an exclusive fund focused on the metaverse for its private banking clients in Hong Kong and Singapore. It intends to position itself as a top bank for high net worth and ultra-high net worth clients in Asia.
So far this year, shares of HSBC have gained 3.3% against the industry’s decline of 12.2%.
Image: Bigstock
HSBC in Talks to Sell Russia Business, Joins Other Lenders
HSBC Holdings plc (HSBC - Free Report) is in talks to sell its Russia corporate lending business to Expobank. The discussions with Mr. Kim, the owner of Expobank, are likely to be at an advanced stage. The move comes when many of the world’s top financial companies are looking to either sell or reduce their business in Russia post the Russia-Ukraine conflict.
Expobank has not yet made any comment on the matter.
By June 2021-end, HSBC’s Russia business was worth 89.9 billion rubles and employed nearly 250 people, per Bloomberg, which was the first to report the talks, citing people familiar with the matter.
In 2011, HSBC exited the retail banking business in Russia. Now it only serves corporate clients in the region. Recently, HSBC said that it is suspending the addition of new customers to its existing Russian business, but the bank has so far stopped short of pulling out completely from Russia. Thus, it currently employs around 200 staff in the country.
Notably, with Russia’s economy being restricted from the global financial system due to its Ukraine invasion, numerous banks with a significant footprint in the country have eyed opportunities to exit Russia as western sanctions have made operating there increasingly difficult.
This April, French bank, Societe Generale (SCGLY - Free Report) , said that it is ceasing its banking and insurance activities in Russia. SCGLY also announced the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group’s Russia insurance subsidiaries to Interros Capital, the previous shareholder of Rosbank.
A couple of days ago, it was reported that Citigroup (C - Free Report) has been negotiating with local buyers and privately-owned Russian companies, including Expobank and insurance company Reso-Garantia, for the sale of its operations in Russia. Nonetheless, Citigroup will likely retain its license and maintain a stripped-down presence in the region.
While Citigroup announced plans in April 2021 to sell its global consumer business in Russia and other 12 markets, it has now broadened the scope of the planned exit and will fold up other lines of business in the country. This implies that Citigroup would also give up its institutional and wealth management business in Russia.
Other Restructuring and Expansion Efforts by HSBC
In an effort to restructure its operations to further improve operating efficiency, in February 2020, HSBC announced its transformation plan, aimed at reshaping underperforming businesses, simplifying complex organization and reducing costs. As part of this initiative, the company expects to incur $7 billion in charges and achieve at least $5.5 billion of cost savings by 2022-end.
Moreover, HSBC has been continuously undertaking measures to bolster its performance with special focus on building operations in Asia, including Hong Kong and China. In sync with this, the company acquired 100% of the issued share capital of AXA Insurance in Singapore for $529 million this February and agreed to acquire L&T Investment Management Limited.
Also, recently, the bank announced plans to re-launch its private banking business in India in a year. Since the country is experiencing a surge in the number of super-rich, HSBC has been exploring options of re-entering the market.
As part of a group strategy, HSBC exited India’s private banking business in 2015. However, in November 2021, Nuno Matos, the CEO of HSBC’s Wealth and Personal Banking division, said that the bank was exploring whether to re-enter onshore private banking in India.
Apart from these efforts, HSBC has also started an exclusive fund focused on the metaverse for its private banking clients in Hong Kong and Singapore. It intends to position itself as a top bank for high net worth and ultra-high net worth clients in Asia.
So far this year, shares of HSBC have gained 3.3% against the industry’s decline of 12.2%.
Image Source: Zacks Investment Research
Currently, HSBC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.