The Kremlin has given HSBC permission to offload its business in Russia more than a year after the UK bank announced a deal.

In June 2022, HSBC said that it had agreed to sell a 100 per cent stake in its HSBC Bank (RR) unit to Expobank in light of Russia’s illegal invasion of neighbouring Ukraine and subsequent Western boycott of Russia.

In the intervening period, Russian president Vladmir Putin has tightened restrictions on foreign asset sales which require his approval. The order, signed by Putin in August 2022, banned investors from countries which have sanctioned Russia over its invasion of Ukraine from selling shares in key energy projects and banks.

On Monday, Moscow issued an order that said it was allowing Expobank to acquire 100 per cent of the HSBC Europe-owned unit.

HSBC last year said that it had taken a $300 million loss on the expected sale, with Moscow demanding discounts of at least 50 per cent on foreign asset sales leading Western banks to find it difficult to cut ties.

It subsequently said in September that it would halt commercial payments by business customers to and from Russia and Belarus.

The news should serve as a boost for HSBC ahead of presenting its 2023 full-year earnings on Wednesday.

Expobank was sanctioned by the US Treasury in December as part of wide-ranging restrictions targeting Russia’s energy and financial sectors. The Treasury said that the bank had been sanctioned "for operating or having operated in the financial services sector of the Russian Federation economy".

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