Japan's Orix eyeing Standard Chartered's PrimeCredit unit
Japanese firm is said to be weighing a bid for the British bank's PrimeCredit business in HK
Orix, Japan's most acquisitive financial firm, is considering bidding for Standard Chartered's consumer credit unit in Hong Kong, two people with knowledge of the matter said.
Orix may team up with another investor to buy PrimeCredit, said one of the people, asking not to be identified because the information is private.
London-based Standard Chartered wants to sell the unit for about US$700 million, almost three times book value, and plans to compile a shortlist of potential bidders this month, another person said.
Standard Chartered chief executive Peter Sands said last month that he may sell the unit as the British bank cuts costs and pares operations where it does not have sufficient scale. Buying PrimeCredit would help Tokyo-based Orix, whose businesses include leasing, lending and real estate, expand abroad as a shrinking population limits the domestic growth potential of Japanese companies.
Atsushi Horii, a spokesman for Orix, declined to comment on whether the company is interested in buying PrimeCredit. "The bank is exploring strategic options for the consumer finance business," Horii said.
Standard Chartered spokeswoman Gabriel Kwan said in an e-mailed statement: "We are in the process to determine a course of action and we would stress that no formal decision has been made."
Shares of Orix fell 1.2 per cent to 1,346 yen (HK$102.70) at the close of trading in Tokyo, extending this year's drop to 27 per cent. The benchmark Topix index is down 13 per cent in 2014.
Net income at PrimeCredit totalled about HK$520 million last year, one of the people said. That compares with profit of HK$480.9 million in 2012, company statements say.
Standard Chartered said in January that it is merging its consumer and corporate-banking operations to trim costs and Sands in November said the lender will review its businesses to cut back or withdraw from less profitable markets.
The bank's full-year profit fell for the first time in a decade in 2013.
Orix has announced more than 20 investments in companies over the past two years, the most of any Japanese financial institution, according to data.
