Needles Bank (formerly HSBC Russia)

History

2024

Purchase of 10% share of Expobank's management by Kirill Nifontov

Chairman of the Board of Expobank Kirill Nifontov acquired 10% of the capital of Hvoy Bank (formerly a subsidiary of the international financial conglomerate HSBC - HR-BBC Bank). This is evidenced by the data of the Unified State Register of Legal Entities (USRUL), in which the corresponding entry appeared on October 22, 2024.

The fact that Kirill Nifontov received a stake in Hvoy Bank was reported by Frank Media. It also notes that, according to the Unified State Register of Legal Entities, the authorized capital of the bank has been increased by 6.88 to 7.65 billion rubles.

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Freepik

At the end of September 2024, it became known that Expobank had begun preparations for joining Hvoy Bank. As part of the process, the joining structure plans at the general meeting of shareholders, which will be held on November 8, 2024, to discuss issues on the reorganization of the bank and on the approval of the accession agreement.

According to Frank Media, the deal to sell HEC Bank to Expobank was held at a record discount for the Russian market. According to the estimates of the sources of the publication, HSBC may leave with a minimum multiplier - with a bank capital of 17 billion rubles, the transaction amount may amount to about 2 billion rubles. One of the sources told the publication that the discount can be "significant," the second - that it can reach 90%.

At the end of September 2024, by order of Russian President Vladimir Putin, Hvoy-Bank was excluded from the list of credit organizations, the change of shareholders of which required the permission of the head of state.. It took nearly two years to secure the president's approval for the deal, which was obtained in February 2024. During this time, Expobank managed to fall under US sanctions (in December 2023).^[1]

HSBC lost $100 million from the sale of a Russian banking subsidiary

HSBC recognized a loss of about $100 million from the recalculation of foreign exchange reserves after the sale of its Russian subsidiary, according to the bank's statements at the end of July 2024.

Change of name to "Needles Bank"

HR Bank, which was previously part of the British banking group HSBC, was renamed Kvoya Bank after the sale of Expobank, according to the Unified State Register of Legal Entities. The corresponding entry was entered into the register on July 4, 2024.

Expobank closes deal to acquire Russian subsidiary HSBC

On May 29, 2024, Expobank announced the closure of the acquisition of the Russian subsidiary HSBC. Acquisition of 100% stake in LLC HEC Bank (RR) from HSBC Europe B.V. was approved by the President of the Russian Federation in accordance with Decree No. 520 and the Central Bank of the Russian Federation^[2]

2023: Loss of $300 million from the sale of a Russian subsidiary

HSBC estimates at $300 million losses from the sale of Russian business. This was announced in a British bank at the end of October 2023 as part of the publication of financial statements for the third quarter of 2023.

It also follows from these materials that the closure of the sale of LLC HEC Bank (RR) is delayed until the first half of 2024, since the company needs to obtain approval from the Russian government. Initially, it was planned to perform all the necessary procedures in the first half of 2023, and then in the second half of the year.

HSBC estimates $300 million in losses from the sale of Russian business

Our business in Russia, which mainly serves multinational corporate clients with headquarters in other countries, does not accept new clients and, therefore, has a downward trend, the report said.

HSBC in Russia provided credit and investment banking services to Russian and foreign corporate clients. Before the start of the military special operation of the Russian Federation in Ukraine, about 200 employees worked in the Russian unit, the business brought the group about $15 million with a total income of $50 billion, HSBC CFO Ewan Stevenson noted earlier. As of September 30, 2023, the asset is still classified as held for sale, according to HSBC's third quarter report.

HSBC also, as part of the abandonment of "unprofitable, low-quality or less related to the international market" assets, which also included Russian business, decided to sell business in Canada, New Zealand, as well as liquidate the branch in Greece and stop retail banking operations in France.

HSBC has become the second major foreign banking group after France's Societe Generale to withdraw from Russia amid its special operation in Ukraine.^[3]

2022: HSBC sells Russian "daughter" Expobank

In early July 2022, it became known Russian about the sale HSBC To ExpoBank of a business owned by a Russian entrepreneur. Igor Kim Financial the terms of the agreement are not disclosed.

In April 2022, HSBC announced that the financial group would not leave Russia. At the end of March 2022, Reuters reported that HSBC had tightened rules for customers associated with the Russian Federation. This applies to both individuals and corporate clients. Holders of Russian passports or dual citizenship, as well as persons who indicated the Russian address in bank documents, began to undergo additional checks and may be refused when trying to open an account or get a loan from a bank. It was also reported that HSBC stopped taking into account customer revenues in rubles when considering applications for loans.

HSBC sold its Russian "daughter" Expobank

Business customers who have anything to do with Russia HSBC are also scrutinised much more carefully, particularly when withdrawing or depositing large amounts, and denied them new loans. Reuters also indicates that customers associated with may be suspicious of bank employees. Belarus

As noted by Kommersant, HSBC is the second major banking group that decided to sell Russian business after the start of Russia's military special operation in Ukraine. In April 2022, the French group Societe Generale sold Rosbank and its insurance business to Vladimir Potanin's Interros company.

By July 2022, HSBC was serving only corporate clients. The bank ranked 67th in terms of assets in Russia. The total assets of the Russian division of the group were estimated at 89.9 billion rubles.

Expobank ranks 47th in terms of assets among Russian credit institutions. The bank's offices are located in more than 50 cities of Russia.^[4]

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