NewHSBC to sell Brazil unit for US$5.2 billion, H1 profits climb 10 per cent

HSBC Holdings posted strong earnings for the first half of the year on Monday while also disclosing an agreement to sell its entire business in Brazil to Banco Bradesco for US$5.2 billion.

Pre-tax profits at HSBC grew by about 10 per cent year on year to US$13.6 billion in the first half of 2015, coming in above expectations. Operating expenses climbed to US$19.2 billion, an increase of about 5 per cent from the same period last year. The bank also booked US$1.14 billion in legal fees.

The deal in Brazil, struck on Friday, was a positive signal from the bank at a time when management is striving to demonstrate quick work on a major restructuring plan launched in June.

Analysts noted in June that the latest plan from chief executive Stuart Gulliver, which included cutting about 50,000 jobs and lightening the balance sheet by US$290 billion in risk-weighted assets, could prove too similar to a reform he initiated in 2011.

In a statement in HSBC’s earnings report, Gulliver stressed the progress he was making toward seeing the strategy through, including the reduction of US$50 billion in risk-weighted assets.

“We are executing these plans and have significant momentum moving into the second half of the year,” Gulliver said in a statement. Management was scheduled to do a press briefing late on Monday from Hong Kong.