New | HSBC starts talks on Brazilian unit sell-off amid redeployment of assets in Asia
HSBC Holdings was moving quickly on efforts to cut down risk-weighted assets, starting with the possible sell-off of its troubled Brazil unit for US$3.75 billion.
HSBC Holdings was moving quickly on efforts to cut down risk-weighted assets, starting with the possible sell-off of its troubled Brazil unit for US$3.75 billion.
The UK-based bank started talks on Monday with Banco Bradesco, Reuters reported, citing unnamed sources. A deal could be announced before the end of July if HSBC accepts the Brazilian bank’s bid, which valued HSBC’s unit at 1.2 times book value, according to the report.
The intention to sell-off of operations in Brazil and Turkey were formally announced at a meeting with investors on June 9, where the bank’s chief executive Stuart Gulliver outlined a plan to reduce risk-weighted assets by US$290 billion while also redeploying assets in Asia.
“The goal is still reallocation of risk-weighted assets to Asia … [Disposals] in Brazil and Turkey would be part of that,” said BNP Paribas analyst Dominic Chan.
HSBC’s share price was largely unchanged on Tuesday at 11am in Hong Kong. HSBC in Hong Kong declined to comment.
Of the US$290 billion HSBC plans to cut out of its global balance sheet, about US$110 billion were related to Brazil, Turkey and other smaller planned disposals.