HSBC Holdings PLC, Europe’s largest bank by market value, agreed to sell its Japanese private banking business to Credit Suisse Group AG.
Sale of the unit, which had assets valued at US$2.7 billion as of Oct. 31, is expected to be completed in the second quarter of next year, London-based HSBC said in a statement yesterday, without disclosing the price.
HSBC chief executive officer Stuart Gulliver is reversing the bank’s expansion over the past two decades, selling assets and cutting jobs as the European debt crisis saps profit and global regulators boost capital requirements.
In July, the bank agreed to sell almost half its US branches to First Niagara Financial Group Inc for about US$1 billion and has also sold part of its Russian consumer banking unit.
“This is clearly not a fire sale,” Sandy Mehta, the Hong Kong-based chief executive officer of Value Investment Principals Ltd, said yesterday in a phone interview. “It’s a relatively low-growth area for them. If they sell it at a reasonable valuation, that is very positive for HSBC.”
Shares of HSBC rose 2.3 percent to HK$59 at 3pm in Hong Kong, outpacing the 1.3 percent gain in the territory’s benchmark Hang Seng Index. The stock has declined 26 percent this year.
HSBC is seeking buyers for its non-life insurance assets and might consider selling regional units of the business separately, three people familiar with the matter told Bloomberg in October.
The sale could value the non-life operations at US$1 billion to US$1.5 billion, they said, asking not to be identified because the sale process is private.
HSBC aims to cut as much as US$3.5 billion of expenses over the next two years as it tackles wage inflation in faster-growing economies and prepares for stricter capital rules, the bank said in May.
Japan’s high-net-worth wealth pool of US$4.63 trillion increased 6.97 percent last year from the previous financial year, according to Scorpio Partnership, an adviser to wealth management institutions.
The number of millionaire households increased by 12.2 percent last year to about 12.5 million, led by the US, followed by Japan, the Global Wealth Report by Boston Consulting Group in May shows.
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