It looks like Western retail banks are calling it quits on Russia. Both Barclays and HSBC look to be shuttering their Russian operations, following loud entries into a market that once seemed ripe for massive growth.
As Ben Aris reports, Barclays announced in February that it was seeking a buyer for its retail business, three years after paying £373 million for local bank Expobank. HSBC is rumored to be doing the same, though no official announcement has been made, he says.
The cause is multifold: effects of the financial crisis, low interest rates leading to lower profits and the state push to ensure that domestic banking giants VTB and Sberbank remain industry leaders.
The two British banks are just the latest to leave Russia. Holland’s Rabobank and Spain’s Santander quit last year, while Belgium’s KBC Groep NV and Swedbank AB have cut back their Russian operations, citing stiff competition.