HSBC Holdings, parent of Hong Kong's biggest lender, is to buy the financial services arm of British clothing retailer Marks & Spencer for GBP762 million (HK$11.04 billion).
The world's third-largest bank by market value is negotiating a similar-sized bid for a stake in China's Bank of Communications, and is also reported to be vying with global rivals Citigroup and Newbridge Capital for access to Japan's consumer finance market.
'We go from one acquisition story to another and the message is that HSBC has done its big transformational acquisition with Household International, and is now filling out its higher-yielding consumer business on an opportunistic basis,' JP Morgan bank analyst Craig Turton said.
US consumer financier Household International generated US$1.83 billion in a maiden full-year contribution to HSBC's pre-tax profit last year.
That helped lift the group's pre-tax result 41 per cent to US$8.77 billion of which US$2.25 billion or 25.6 per cent came from the newly established consumer finance division.
It also led to Hong Kong being displaced by the US as the single-biggest profit centre for the group.
Household's profitability was boosted by the deal partly because of the improved credit ratings and lower funding costs the HSBC partnership brought, BNP Paribas analyst Patrick Ho said.
