While western banks abandon their Russian business en masse, one British megabank is refusing to go along with the crowd.
The FT reports that HSBC has repeatedly edited research notes produced by its analysts to remove references to the "war" in Ukraine, as the British bank - known for its massive Asia footprint - resists pressure to shutter its Russian business. According to the FT's sources, the bank's committees in charge of reviewing internal publications have repeatedly substituted the word "conflict" in instead (although they have let the word "war" stand when it's used in reference to reports in the financial press).
While HSBC insiders say that the bank is able to be more frank about the situation internally, it's worried about angering the Russian government, since it has roughly 200 personnel in the country.
For context, HSBC's Russian subsidiary represents only a tiny piece of the bank's overall business, with assets of 89.9 billion rubles (roughly $900 million) as of last June. The bank opened a retail business in Russia in 2009, but closed it two years later. Since then, its Moscow office has focused on services to multinational and Russian companies.
While HSBC has promised to comply with all sanctions, it has resisted pressure from British lawmakers to pull out of Russia entirely. In response, a group of MPs are pushing for the British government's pension scheme to dump its HSBC shares.
To be sure, this isn't the first time HSBC has been criticized for refusing to pull its business, as the FT points out.
The controversy over HSBC’s stance on Russia follows criticism of its position on China’s political crackdown in Hong Kong. HSBC and rival Standard Chartered both supported a new security law imposed on the territory in 2020, saying it would promote long-term stability, amid huge protests against what opponents called a chilling effect on civil liberties.
HSBC has in the past had to tread a careful line to avoid upsetting Beijing, which has also steadfastly refused to describe the invasion of Ukraine as a war. Hong Kong and mainland China together accounted for 46 per cent of HSBC’s $18.9bn pre-tax earnings in its last financial year.
Many of HSBC's rivals have already pulled their business from Russia, including UBS, Goldman Sachs and Deutsche Bank. On Monday morning, Swiss banking giant Credit Suisse announced that it would stop pursuing new business in Russia, in keeping with Switzerland's decision to reneg on its centuries-old tradition of neutrality.