HSBC Holdings HSBC has signed an agreement to sell its private banking business in Germany to BNP Paribas BNPQY. The deal's financial terms, expected to close in the second half of 2025, have not been disclosed.
The transaction, still subject to relevant regulatory approvals, is projected to result in a gain on sale for HSBC. As part of the agreement, the assets and customers of HSBC Germany’s private banking business, along with nearly 120 employees, will be transferred to BNPQY.
For BNPQY, the deal aligns with its goal “to position BNP Paribas Wealth Management among the top leading players in Germany.”
Michael Schleef, CEO of HSBC Germany, said, “We are very pleased that we have found a strategic buyer for our private banking activities in Germany who is well positioned to take the business forward.” The transaction will help further simply the company’s business model and enable it to focus on the global “wholesale banking business.”
Divestiture Aligns With HSBC’s Asia Pivot Strategy
HSBC has been actively restructuring its global operations to focus on the lucrative Asia region, where the bank believes it can leverage its existing strengths to drive growth. Last month, Bloomberg reported that the company is considering selling its South African businesses, which has garnered interest from regional banks and institutions from China and the United Arab Emirates.
HSBC has sold its retail operations in the United States, Canada, France, New Zealand, Greece and Russia. In April 2024, it announced an agreement to divest its Argentina business, while in February, the company agreed to sell its Armenian unit.
HSBC intends to reinvest the proceeds from the divestitures in expanding its presence in Southeast Asia and China. In sync with this, in June 2024, the company acquired Citigroup's C retail wealth management business in China. More than 300 employees of Citigroup were transferred to HSBC as part of the deal.
Earlier, in January, it acquired Singapore-based SilkRoad Property Partners Group. Also, HSBC re-launched its private banking business in India. In 2022, the company acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited.
Over the past year, shares of HSBC have rallied 12.1%, underperforming the industry’s growth of 26.6%.
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Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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