HSBC said it was in talks to sell its operations in Colombia, Peru, Uruguay and Paraguay, part of the bank's strategy to streamline operations and dispose of non-core assets under the leadership of chief executive Stuart Gulliver.
'What this shows is that HSBC wants to exit from those markets, which are too small or which have too little future potential to make a major impact on group profits,' said James Antos, a senior analyst at Mizuho Securities.
Antos also said the proposed sale was positive for the bank, as this would cut costs without cutting into the meat of its business in Latin America.
HSBC operates in 80-odd regions globally, but it has been shifting resources to emerging markets in the past year to improve its profitability. In Latin America, the bank has been focusing on key markets, in particular Brazil.
HSBC has jettisoned a series of non-core businesses. It sold its profit-making general insurance business in Asia and Latin America to French insurer AXA and Australian insurance group QBE in March. It also sold its private banking business in Japan to Credit Suisse in December.
HSBC this week unveiled a better-than-expected first-quarter profit, but the result was overshadowed by losses in Europe and a worse-than-expected rise in claims for payment protection insurance in Britain.