HSBC HOLDINGS, Europe’s biggest bank by market value, is to close its retail and private-banking units in Russia to focus on corporate clients as domestic lenders gain market share.
“Following a strategic review, it’s clear that the strongest opportunity for HSBC in Russia lies in servicing corporate and institutional clients,” said Huseyin Ozkaya, HSBC’s London-based country chief.
State-run banks led by OAO Sberbank and VTB Group are expanding their corporate and brokerage businesses, squeezing out international competitors as the Kremlin seeks to turn Moscow into a global financial centre.
Britain’s Barclays, Spain’s Banco Santander, Morgan Stanley of the US and Sweden’s Swedbank are among foreign competitors who have either quit or curtailed Russian retail operations since 2010. “HSBC doesn’t have the scale to compete here,” said Rustam Botashev, deputy head of research at UniCredit in Moscow.
“Foreign banks came to Russia when the market was booming, but when the crisis hit, they weren’t able to increase their presence due to problems in their domestic markets and the growing influence of state-controlled banks.”
In March 2008, HSBC announced a €137 million injection of capital into its Russian unit that “demonstrated” its long- term commitment, it said at the time.
Three of HSBC’s four Moscow branches will close on June 30th. A branch in St Petersburg will remain open for a few months longer, the company said. All HSBC credit cards will stop working on May 31st, and all debit cards on June 30th. – (Bloomberg)
