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HSBC Mulls Sale Of Certain Assets In Mauritius

HSBC Mulls Sale Of Certain Assets In Mauritius
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HSBC Holdings Plc (HBC: Quote,HSBA.L) on Monday confirmed that its wholly-owned subsidiary The Hongkong and Shanghai Banking Corp. Ltd. is in discussions concerning a possible sale of its Retail Banking and Wealth Management business in Mauritius.

The British banking giant stated that the talks are ongoing and may or may not lead to a deal, and that it will make a further announcement if or when appropriate.

"HSBC remains committed to the Mauritius market and continues to invest in growing its global banking and markets and commercial banking businesses there," the company said in a statement.

In mid-January, Bloomberg had reported that HSBC is considering selling its retail banking business in Mauritius and has lured three bids from banks including Mumbai-based State Bank of India and Port Louis, Mauritius-based AfrAsia Bank and Bramer Banking Corp.

Mauritius, with a bankable population of about 400,000, has 20 banks with total assets of $30 billion as of the end of October, according to central bank data. Its banking market reportedly is dominated by Mauritius Commercial Bank and State Bank of Mauritius Ltd.

HSBC, which is executing its strategy outlined at the Investor Day in May 2011 to cut costs by up to $3.5 billion by 2013, recently announced plans to sell its general insurance businesses in Hong Kong, Singapore, Argentina and Mexico to AXA Group and Australia's QBE Insurance Group Ltd. (QBEIF.PK, QBE.AX) for about $914 million cash.

HSBC in January agreed to sell the whole of its banking operations in Costa Rica, El Salvador and Honduras to Banco Davivienda S.A. for $801 million in cash, and in December, it agreed to sell its private banking business in Japan to Swiss banking giant Credit Suisse Group (CS) for undisclosed terms.

In August 2011, the bank said it was in talks to sell its U.S. card and retail services unit as part of a plan to eliminate 30,000 jobs by the end of 2013 to curtail expenses.

The planned costs savings are expected to facilitate the bank's growth in key markets and investment in new products, process and technologies. It will also provide a buffer against regulatory and other inflationary headwinds, the bank had said earlier.

According to a previous comment by HSBC CEO Stuart Gulliver, these planned sales would "enable us to focus our capital and resources on the growth of our core businesses, including the building of our broader wealth management capabilities."

While announcing a 15 percent increase in fiscal 2011 pre-tax profit in late February, HSBC stated that it is focused on 2013 target cost efficiency ratio between 48-52 percent, in comparison to fiscal 2011 ratio of 57.5 percent.

The bank also had added that it expects the dynamic markets of Asia, Latin America and the Middle East to help push its 2012 results, even though the macroeconomic, regulatory and political uncertainties would persist and challenge 2012 and beyond.

In London, HSBC shares are currently trading at 560 pence, up 1.70 pence or 0.30 percent.

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by RTT Staff Writer

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