HSBC Holdings sells part of its Russian retail operations to Citigroup Inc
June 14, 2011‐ Russia
HSBC Holdings Plc became the latest financial group to move out of the Russian retail / consumer banking business when the bank announced it is selling part of its assets to Citigroup Inc. The decision appears to have come after Russian domestic lenders have begun gaining market share. HSBC however will continue to operate a corporate office to serve its corporate clients.
HSBC Holdings Plc is next to Barclays Plc to close their Russian retail banking operations despite the Russian Government is wooing bankers from round the world to start their operations in Russia. Barclays Plc announced its decision in February. Spain's Banco Santander SA, Morgan Stanley of the U.S. and Sweden's Swedbank AB are other prominent international financial bankers who either moved out or intends to move out of Russia's retail banking space. It is only two years ago that HSBC has announced $200 million program in order to expand the Russian retail banking operations. HSBC says it is rethinking of its operations and making moves to be more profitable and hence the decision to move out of Russia.
Russia's state-run banks OAO Sberbank and VTB Group have aggressively improved their corporate and brokerage business skills making it tough for international financial groups to compete with them in Russia.
HSBC Russia is likely to contact its customers to assist them in switching their deposit and current accounts to Citibank. The later intends to provide special benefits to HSBC clients. The operation of transferring the operations to Citibank would be completed by the third quarter of 2011.
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