HSBC mulls sale of South African businesses in pivot to Asia
HSBC is reportedly considering selling its South African businesses as part of its pivot towards Asian markets.
The South African branch unit and securities business of Europe’s biggest bank have attracted bidding interest from banks in the region, as well as China and the United Arab Emirates, Bloomberg News reported.
The details of any possible deals have not been finalised and there is no certainty that any transaction will take place, it was said.
An HSBC spokesperson declined to comment when approached by CityAM
HSBC has operated in South Africa since 1995, mainly in commercial banking, global banking and global markets. Its retail and business banking units in Mauritius were acquired by Absa Group last month.
News of a potential sale points to the continuation of HSBC’s strategy to gradually reduce its global footprint and pivot towards Asia under newly-appointed chief executive Georges Elhedery, currently the bank’s finance head.
Elhedery is due to take over as CEO from Noel Quinn on 2 September.
Quinn’s tenure has been marked by efforts to improve shareholder returns partly by exiting non-core markets and focusing on India, Singapore and China.
HSBC has exited retail markets in the US and France, and in March completed the sale of its Canadian unit to RBC in March.
The London-based bank struck a deal to offload its business in Argentina in April, booking a $1.1bn (£877m) impairment tied to the sale in its first-quarter earnings.
Quinn said in April that the recent sales would allow the bank “to focus on markets with higher-value international opportunities”.
Banks all over the world, including HSBC, have seen their profits lifted by the increase in global interest rates over the past few years, but tight monetary policy will be less of a tailwind in the months ahead – encouraging more cost-cutting efforts.