HSBC set on closing Russia unit

just two years, following in the footsteps of British peer Barclays, a document showed yesterday.
“We encourage all customers to close their HSBC Premier and HSBC Plus accounts before June 30, 2011,” the document, sent to HSBC clients, said.
HSBC, whose Russian unit is among the country’s top-100 lenders by assets, will concentrate its business on servicing corporate clients, it said.
The move by HSBC, which started retail operations in Russia in mid-2009, followed an announcement by Barclays in February it was to sell its Russian retail unit as it was unable to compete and would focus on investment banking.
Russia’s banking sector is dominated by state-owned banks, which control around 60 percent of the system’s overall assets.
Top lenders Sberbank and VTB have also been expanding in investment banking, meaning competition for business being generated by a 1 trillion rouble (US$33 billion) state privatisation drive will be tough.
Privately owned Icelandic investment company Straumborg may also quit Russia’s retail banking sector by selling Norvik, Kommersant reported yesterday, quoting banking sources.
Straumborg, which bought Norvik before the global financial crisis in 2006, has already found a potential Russian buyer for the asset, the paper said.
The Russian units of Italian lender UniCredit and Austrian group Raiffeisen Bank International are the largest foreign players in Russia, being eighth and ninth by assets respectively. Along with French bank Societe Generale, they have said they will develop their businesses in Russia. – Reuters.