As war grinds on, HSBC halts Russia payments

HSBC (LON:HSBA) will halt commercial payments by business customers to and from Russia and Belarus, the bank said on Friday, as lenders tighten restrictions beyond sanctions imposed after Russia’s invasion of Ukraine.

Europe’s biggest bank – whose global business spans China and the United States – said the volume of sanctions and trade restrictions globally imposed on Russia and its close backer Belarus had made it “increasingly challenging” to operate.

“We have therefore reached the decision to restrict commercial payments by our corporate entity customers to or from Russia and Belarus through HSBC,” a HSBC spokesperson said.

Business customers have been informed the bank no longer intends to process the payments, the spokesperson added, rolling out globally from this month.

Japan’s financial news service Nikkei first reported the move earlier on Friday. The report said customers in Hong Kong had been told the restrictions would apply there from Oct. 27.

HSBC has announced an exit from Russia, but the planned sale of its unit to local lender Expobank has hit delays and is pending final regulatory approval.

The West blocked several Russian banks’ access to the international SWIFT payments system soon after Moscow invaded Ukraine in February last year, with Sberbank and VTB forced to shutter operations across much of Europe.

Western governments also froze around $300 billion of the Russian central bank’s reserves.

Not all ties with Russia have been cut and trade, albeit reduced, continues. Some European banks, including UniCredit (LON:0RLS) and Raiffeisen Bank International, have large businesses there.

The United States has pushed for harsher action against banks with Russia links, while China in contrast has deepened economic ties with Russia.