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HSBC Explores Selling Few German Business Units Amid Asia Focus
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Continuing with its efforts of focusing more on core operations in Asia, HSBC Holdings plc (HSBC - Free Report) plans to sell its various business units in Germany. The news was first reported by South China Morning Post, citing people familiar with the matter.
According to the people familiar with the matter, who asked not to be identified as the talks are private, HSBC has started working with advisers on a review. The talks are at an early stage and it is not yet certain whether a sale will take place.
The units in consideration for sale are HSBC’s German wealth-management, custody and fund administration units. However, the bank’s corporate-banking and trading activities in the country will not be affected by the review.
For a long time now, HSBC has been exiting several markets across the globe as part of its business restructuring initiative. In 2020, the company announced its transformation plan to reshape underperforming businesses, simplify complex organizations and reduce costs.
A couple of days ago, the bank completed the divestiture of its Canada unit to Royal Bank of Canada (RY - Free Report) for C$13.5 billion. The deal, announced in November 2022, will lead to an estimated gain on sale of $4.9 billion in the first quarter of 2024.
The transaction is expected to bolster RY's position in a market where the top six banks control around 80% of banking assets.
Noel Quinn, CEO of HSBC, said, “Completing this deal is another important milestone in HSBC’s transformation, and it will provide capital that will enable us to grow our core businesses.”
In February 2024, HSBC agreed to sell its Armenian unit to Ardshinbank for reallocating capital to higher-growth markets. It has also exited from the United States, France, New Zealand and Greece and is in the process of fully exiting Russia (as it has received the approval for the same).
In addition to these, the bank has been undertaking measures to bolster its performance with a special focus on building operations across Asia. HSBC intends to position itself as a top bank for high-net-worth and ultra-high-net-worth clients in the region.
In sync with this, in October 2023, the company announced a deal to acquire Citigroup's (C - Free Report) retail wealth management business in China. As a result of the sale, C will transfer assets under management and deposits worth approximately $3.6 billion (as of August 2023) and the associated wealth customers in 11 major cities to HSBC Bank China.
Moreover, HSBC re-launched its private banking business in India after eight years. Further, in 2022, the company acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited.
Over the past year, HSBC shares on the NYSE have climbed 15.7% compared with the industry’s growth of 19.8%.
Image: Bigstock
HSBC Explores Selling Few German Business Units Amid Asia Focus
Continuing with its efforts of focusing more on core operations in Asia, HSBC Holdings plc (HSBC - Free Report) plans to sell its various business units in Germany. The news was first reported by South China Morning Post, citing people familiar with the matter.
According to the people familiar with the matter, who asked not to be identified as the talks are private, HSBC has started working with advisers on a review. The talks are at an early stage and it is not yet certain whether a sale will take place.
The units in consideration for sale are HSBC’s German wealth-management, custody and fund administration units. However, the bank’s corporate-banking and trading activities in the country will not be affected by the review.
For a long time now, HSBC has been exiting several markets across the globe as part of its business restructuring initiative. In 2020, the company announced its transformation plan to reshape underperforming businesses, simplify complex organizations and reduce costs.
A couple of days ago, the bank completed the divestiture of its Canada unit to Royal Bank of Canada (RY - Free Report) for C$13.5 billion. The deal, announced in November 2022, will lead to an estimated gain on sale of $4.9 billion in the first quarter of 2024.
The transaction is expected to bolster RY's position in a market where the top six banks control around 80% of banking assets.
Noel Quinn, CEO of HSBC, said, “Completing this deal is another important milestone in HSBC’s transformation, and it will provide capital that will enable us to grow our core businesses.”
In February 2024, HSBC agreed to sell its Armenian unit to Ardshinbank for reallocating capital to higher-growth markets. It has also exited from the United States, France, New Zealand and Greece and is in the process of fully exiting Russia (as it has received the approval for the same).
In addition to these, the bank has been undertaking measures to bolster its performance with a special focus on building operations across Asia. HSBC intends to position itself as a top bank for high-net-worth and ultra-high-net-worth clients in the region.
In sync with this, in October 2023, the company announced a deal to acquire Citigroup's (C - Free Report) retail wealth management business in China. As a result of the sale, C will transfer assets under management and deposits worth approximately $3.6 billion (as of August 2023) and the associated wealth customers in 11 major cities to HSBC Bank China.
Moreover, HSBC re-launched its private banking business in India after eight years. Further, in 2022, the company acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited.
Over the past year, HSBC shares on the NYSE have climbed 15.7% compared with the industry’s growth of 19.8%.
Image Source: Zacks Investment Research
Currently, HSBC carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.