In keeping with its strategy of exiting from non-core
HSBC Holdings plc
) is planning to close its operations in Libya. The representative
office of the bank in Tripoli, that manages investments in the
country, will be closed. The news was first reported by The
The closure will sever HSBC's ties with Libya, which dates back to
1959 when the company acquired The British Bank of the Middle East.
Further, the bank also had a stake in the British Arab Commercial
Bank, which it sold to the Libyan Foreign Bank in 2010.
At present, HSBC's Tripoli office (opened in 2006) employs less
than 10 people, constituting a small part of the company's global
The decision to close the Libyan operations was possibly taken
after it failed to meet the criteria set by management for
determining business exits. HSBC had closed its Iraqi operations on
similar grounds in Jun 2013.
Since 2011, HSBC has been divesting or closing operations across
the globe in its attempt to streamline businesses. Last month, the
company had announced the sale of its Switzerland-based portfolio
of private banking assets worth $12.5 billion to LGT Bank
(Switzerland) Ltd. (Read More:
HSBC Sells $12.5B Swiss Private Banking Assets to
Also, HSBC has an expense-savings initiative in place. Following
the success of the first round of its cost-savings plan, the bank
announced the next round in May 2013 with a target to save an
additional $2-$3 billion by 2016.
Apart from HSBC, many other global banks including
Deutsche Bank AG
JPMorgan Chase & Co.
), Credit Suisse Group AG and
) are undertaking streamlining initiatives to offset fundamental
We believe that HSBC's plan to focus on its core, profitable
operations will aid bottom-line growth going forward. With the slow
economic recovery and continued low rate environment, the bank's
plan to cut expenses will prove to be a long-term catalyst.
Currently, HSBC carries a Zacks Rank #5 (Strong Sell).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
JPMORGAN CHASE (JPM): Free Stock Analysis
BARCLAY PLC-ADR (BCS): Free Stock Analysis
DEUTSCHE BK AG (DB): Free Stock Analysis Report
HSBC HOLDINGS (HSBC): Free Stock Analysis
To read this article on Zacks.com click here.