HSBC Holdings plc
) has announced the sale of its Switzerland-based portfolio of
private banking assets worth $12.5 billion to LGT Bank
(Switzerland) Ltd, a wholly owned subsidiary of LGT Group
Foundation of Liechtenstein. This latest move by HSBC underscores
its strategy of reducing costs and improving profitability by
shedding non-core businesses and emphasizing on higher-margin
Subject to usual regulatory approvals, this asset sell-off through
the Geneva, Switzerland-based HSBC Private Bank (Suisse) SA, a
wholly owned subsidiary of HSBC, is expected to complete by the end
of fourth-quarter 2014. The terms and conditions of the transaction
have not been disclosed yet, but it is expected to be an all-cash
HSBC has operations in over 75 countries and as of Mar 31, 2014,
had assets worth of $2.76 trillion. In recent times, there has been
a shift in HSBC's business strategy as it attempts to concentrate
on markets with high growth potential and scale back its non-core
Only a week ago, HSBC Life (UK) Limited, a wholly owned subsidiary
of HSBC, inked a deal to vend off its UK pension business to
ReAssure Limited, a wholly owned subsidiary of Admin Re, a Swiss Re
Per the latest deal, the $12.5 billion worth private banking assets
of HSBC will be integrated into the LGT Bank in Switzerland, which
had about $24 billion in assets under management at 2013 end. The
new portfolio is expected to improve LGT Bank's wealth management
business in several markets, including Central and Eastern Europe,
Latin America and Western Europe.
Similar to HSBC, many other major global banks are now seeking to
curtail non-core operations so as to use capital optimally for
shareholders' benefit. Last month,
Deutsche Bank AG
) inked a deal to sell off the Las Vegas casino resort, The
Cosmopolitan, to a private equity group -
The Blackstone Group L.P.
) - at a price of $1.73 billion. HSBC's present divestiture echoes
the same strategy.
Currently, HSBC carries a Zacks Rank #3 (Hold). A better-ranked
foreign bank is
BBVA Banco Franc
). BBVA Banco carries a Zacks Rank #1 (Strong Buy)
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