British bank HSBC is beginning to wind down relations with a host of Russian banks including the second-largest, VTB, according to a memo seen by Reuters, as financial institutions start to implement restrictions on Russia.
The United States, Britain, Europe and Canada announced new sanctions on Russia on Saturday - including blocking certain lenders' access to the SWIFT international payment system - following Russia's invasion of Ukraine.
The advisory notice from HSBC, one of the world's largest banks, tells staff how they should apply the new global sanctions on Russia.
Headed "action required" and dated Feb 27, it highlights the fact that the UK Office of Financial Sanctions had authorised "the wind down of certain transactions involving VTB Bank and certain UK subsidiaries".
HSBC declined to comment.
HSBC has little direct exposure in Russia, with its Chief Financial Officer telling reporters last Tuesday it has around 200 employees and annual revenues of $15 million there, a fraction of its global income of $50 billion.
As the world's leading trade finance bank and Europe's second-largest lender, however, HSBC remains a vital cog in the global banking machine and being cut off from its services is a blow for Russia.
The internal notice also sets out other sanctions imposed in recent days by Britain, the European Union and the United States and lists other Russian companies subject to the sanctions, including development bank VEB.
In an indication of the far-reaching nature of the restrictions, HSBC points out that under U.S. sanctions, an entity that is 50% owned or more, directly or indirectly, by one or more blocked persons is itself also considered blocked, whether or not it is on the sanctions list.
EU sanctions apply a similar rule, HSBC said.
Britain said on Monday it was taking further measures against Russia in concert with the U.S. and the EU, including banning any British entities from undertaking transactions with the Russian central bank, finance ministry and wealth fund.
The London Stock Exchange on Friday said it had suspended VTB unit VTB Capital's membership.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU