Russia’s Expobank is buying HSBC Bank, a subsidiary of British investment bank HSBC, at a discount of about 90%; This is a record figure for the Russian market. This was reported by Frank Media said two sources familiar with the details of the upcoming deal.
According to them, with HSBC Bank’s capital of 17 billion rubles, the purchase amount could be around 2 billion rubles. This means that the asset is sold at almost the minimum price.
The parties managed to obtain permission from Russian President Vladimir Putin for this agreement, almost two years after the agreement was signed in 2022. According to the decree, Expobank will be able to purchase 100 percent of Russian HSBC Bank.
The transaction takes place in an environment where there is a general trend for Russian subsidiaries of Western banks to be sold at significant discounts of 50% or more from the intrinsic value of the business. However, despite this background, a 90% discount seems unprecedented, the publication notes.
“Under current conditions, foreign banks are essentially forced to sell their assets in Russia at bargain prices. BKF Bank analyst Maxim Osadchiy states that for HSBC, losing control of local businesses will cost hundreds of millions of dollars.
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