HSBC Holdings plc (HSBC - Free Report) announced that its indirect wholly owned subsidiary, HSBC Bank Middle East Limited, has agreed to sell its Lebanon business unit to Blom Bank SAL.
Blom Bank stated that the transaction is subject to regulatory approval by Banque du Liban. Also, the assets and liabilities of HSBC are expected to be acquired by Blom Bank during the first six months of 2017.
Further, all HSBC employees in the business are expected to be transferred to Blom Bank, following the sale.
This is part of HSBC’s strategy to streamline its operations in order to lower expenses. Notably, in Jun 2015, the chief executive officer, Stuart Gulliver, had initiated another cost-cutting program (slashing nearly 22,000–25,000 jobs globally and divesting unprofitable/non-core operations) with a target to lower expenses by $4.5–$5 billion by the end of 2017.
Moreover, by the end of 2015, HSBC conducted business in 71 countries, lower than 87 in 2011.
People familiar with the matter said that HSBC will continue its private banking operations in the country even after the divestiture.
The acquisition will likely benefit Blom Bank and help it in expanding its corporate and commercial businesses as well as retail activities.
Moreover, this transaction is a part of Blom bank’s strategy to expand its customer base and diversify its assets and revenues.
HSBC has its operations in Europe, Asia, North and Latin America, and the Middle East and North Africa. Particularly in the Middle East, the company conducts business in the United Arab Emirates, Egypt, Qatar, Oman, Bahrain, Kuwait and Algeria.
HSBC had also planned the sale of its unprofitable Turkish unit earlier this year. However, the idea had to be scrapped as the bank could not find a suitable buyer.
Currently, HSBC carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the finance space include Carolina Financial Corporation (CARO - Free Report) , Huntington Bancshares Incorporated (HBAN - Free Report) and Itaú Unibanco Holding S.A. (ITUB - Free Report) .
Carolina has witnessed an upward earnings estimate revision of 12.9% for the current year over the past 30 days. Also, its share price is up 41.9% year to date. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Bancshares also boasts a Zacks Rank #1 and has witnessed an upward earnings estimate revision of 2.4% for the current year for the past 30 days. Moreover, its share price is up 7.9% year to date.
Itaú Unibanco carries a Zacks Rank #2 (Buy). It has witnessed an upward earnings estimate revision of 5% for the current year for the past 30 days and its share price has surged 77.8% year to date.
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