HSBC Holdings closes Russian retail banking operations

26 Apr 2011

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HSBC Holdings PLC is closing its Russian retail-banking arm and in the process will become the latest international company to redeploy resources elsewhere even as the Kremlin attempts to woo foreign capital.

The move comes in the wake of Barclays PLC announcing in February that it would sell its retail-banking operations in Russia after taking a write-down of £243 million ($401.3 million) on an acquisition.

HSBC executives had announced a push into retail banking as part of a $200-million programme to expand the lender's business lines in Russia less than two years ago.

The bank opened four branch offices in central Moscow and one in St Petersburg, while it added cash machines in suburban shopping centrse and a hotel, the lender said on its website.

However, yesterday, it said in an email message to retail-banking clients that that part of HSBC's business would be closed.

The lender faced retail competition both from the giant state-controlled banks with ties to regulators - OAO Sberbank and VTB Group - and also from the more established international banks. These include Austria's Raiffeisen Bank International AG, ING Groep NV, UniCredit SpA and Citigroup Inc.

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