HSBC to close retail business in Russia

HSBC Holdings, Europe’s largest bank, said on Monday it planned to close its retail business in Russia to focus on servicing corporate clients, just two years after starting in the sector.

Another London-based banking giant, Barclays, said in February it would do the same by the end of this year.

“Retail banking operations, including HSBC Premier and HSBC Plus, will be closed to new business with immediate effect, and existing business will be phased out in line with contractual obligations,” HSBC said in a statement.

“We remain strongly committed to the Russian market and are concentrating our resources in providing our corporate and institutional customers with a wide range of corporate banking, investment banking and financial markets products and services. We are maintaining the capital we have committed to our business to support further development of commercial banking and global banking and markets business lines.”

Russia’s banking sector is largely dominated by state-owned banks, which control around 60 percent of assets. The country’s top lenders Sberbank and VTB have also been expanding their investment business, meaning competition in the market will be strong.

Sberbank bought the country’s leading investment house Troika Dialog in March for $1 billion to create its own investment business unit. Sberbank’s main competitor, VTB, launched its own investment unit VTB Capital in 2008, staffing it with a team headhunted from the Moscow unit of Deutsche Bank. It spent $500 million to create the business.

Privately owned Icelandic investment company Straumborg may also quit Russia’s banking sector by selling Norvik bank, Kommersant business daily quoted banking sources as saying on Monday.

MOSCOW, April 22 (RIA Novosti)

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