HSBC eyes Brazil sale as US court reverses US$2.5 billion securities-fraud judgment
HSBC shares climbed 1.3 per cent on Friday to HK$75.2 after the London-based lender said it was considering the sale of its troubled Brazilian unit and a US court reversed a US$2.5 billion judgment on a 12-year-old securities-fraud case against the bank.
HSBC shares climbed 1.3 per cent on Friday to HK$75.2 after the London-based lender said it was considering the sale of its troubled Brazilian unit and a US court reversed a US$2.5 billion judgment on a 12-year-old securities-fraud case against the bank.
After months of speculation on the future of underperforming businesses in Brazil, the United States, Mexico and Turkey, HSBC pointed to the Brazilian operations in a filing to the Hong Kong Stock Exchange as a potential early sell-off.
“HSBC confirms that it is exploring various strategic options for its operations in Brazil, including the potential sale thereof,” the statement said. It also noted that no final decision had been made.
The chief executive of the Brazilian unit of Spanish bank Banco Santander told the media this week that HSBC had started the initial process for selling off operations there.
The bank’s business in South America’s biggest economy has been overshadowed by decades-old cases regarding losses sustained on retail savings accounts. The outcome of the cases, some of which were now at the supreme court, was highly uncertain and could eventually cost the bank up to US$800 million in fines, according to HSBC’s 2014 earnings report.
The bank has said it would look to drastically cut cost in several operations in the Americas, including Brazil. Investors are expected to get a clearer picture at a meeting on June 9. Rumours have circulated for months on the bank’s planned divestment from businesses in Brazil and Turkey.