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Deutsche Bank Aktiengesellschaft (DB) - $25 value - yours FREE >>
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HSBC Gets Russia Unit Sale Approval, Paves Way for Full Exit
HSBC Holdings plc (HSBC - Free Report) gets approval from Russia’s president Vladimir Putin to sell its Russia unit to Expobank. In July 2022, HSBC agreed to sell a 100% stake in the Russia unit, HSBC Bank (RR) LLC.
By June 2021-end, HSBC’s Russia business was worth 89.9 billion rubles and employed nearly 250 people.
Post the Russia-Ukraine conflict, many of the world’s top financial companies began either selling or reducing their businesses in Russia because Western sanctions made operating there increasingly difficult.
Since then, Moscow has steadily tightened restrictions on foreign asset sales because of which, banks require the president’s approval for any deal.
Last year, HSBC said that it took a $300-million loss on the expected sale of its Russia business.
In 2011, HSBC exited the retail banking business in Russia, post which, it only served corporate clients in the region. While HSBC suspended the addition of new customers to its existing Russia business, the bank has so far stopped short of pulling out completely from Russia.
Putin’s latest order is allowing Expobank to acquire 100% of the Russia unit, owned by HSBC Europe BV.
While the approval is not a guarantee for a deal (expected to have a negligible financial impact on HSBC), it marks an important step in the British bank’s efforts to completely detach itself from the Russia markets after months of negotiations.
Over the past six months, shares of HSBC have gained 6.8% on the NYSE compared with the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
Currently, HSBC carries a Zacks Rank #4 (Sell).
A couple of better-ranked stocks from the same space are Deutsche Bank (DB - Free Report) and Banco Santander, S.A. (SAN - Free Report) .
The Zacks Consensus Estimate for DB’s current-year earnings has been revised 5.7% upward over the past 60 days. Shares of the company have gained 19.9% in the past six months. Currently, DB sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for SAN have been revised 11.8% upward for the current year over the past 60 days. The company’s shares have gained 1.3% in the past six months. Currently, it carries a Zacks Rank #2 (Buy).