HSBC Gets Green Light to Sell Armenian Branch

Armenia's Central Bank has given the go-ahead for HSBC, one of Europe's largest banks, to sell its Armenian branch, marking the end of its nearly 30-year operation in the country. This decision makes way for HSBC to exit the Armenian market, transferring ownership of its local subsidiary to Ardshinbank, Armenia’s leading financial institution.

HSBC announced earlier this year that it would sell its Armenian unit to Ardshinbank as part of a broader strategy. The British bank aims to shift its focus from less strategic markets to regions with higher growth potential. This decision aligns with HSBC's global strategy to reallocate resources and invest in more promising opportunities.

Ardshinbank has confirmed the acquisition and assured that the transition will be smooth for HSBC Armenia’s customers. The bank's CEO has promised that the transfer will be “smooth and fluid” for the approximately 30,000 customers of HSBC Armenia. However, the specific details of the transaction, including the financial terms, have not been disclosed yet. The deal is still subject to final regulatory approvals.

HSBC Armenia, established in 1996, is the only local bank in Armenia that is controlled by a major Western financial group. As of now, it holds total assets worth 290 billion drams (about $720 million) and customer deposits amounting to 200 billion drams. The bank’s financial performance has been strong, with net profit increasing from 8 billion drams in 2022 to over 11 billion drams (around $27 million) last year.

In contrast, Ardshinbank reported earnings of nearly 63 billion drams in 2023, showing its significant financial presence in the region. The acquisition of HSBC Armenia will likely strengthen Ardshinbank’s position in the Armenian banking sector.

This move is part of a larger trend for HSBC, which has been reevaluating its global operations. In May 2023, reports suggested that HSBC was contemplating exits from as many as a dozen countries. This comes after the bank had already announced plans to sell off its operations in countries like France, Canada, Russia, and Greece. Notably, HSBC completed the sale of its French retail operations to CCF on January 1, 2024, and the Royal Bank of Canada recently acquired HSBC’s Canadian business.