Chillin' out till it needs to be funded
HSBC sold its vaunted operations in Thailand to local Bank of Ayudhya for a small $115 mln consideration while it had much more troubl eletting go of its LatAm assets selling its bank in Colombia to the local Banco Davivienda , #3 lender in the country. The HSBC operations were in Costa Rica, El Salvador and Honduras.
The Bank of Ayudhya bought wealth assets worth $553 mln which obviously including costs of more than investments, deposits and loan assets in the tage of $115 mln at 22% of assets. The HSBC Japan CEO Stuart Milne, moves into place as India CEO while ex India CEO Stuart Davis moves to Hongkong to head Asia Pacific.
The Colombia assets totaled to $4.3 bln in wealth assets and $2.5 bln in Loan assets according to the WSJ of last week The $16 bln in assets ( 30 T Pesos ) in Central America add to the Davivienda’s $2 bln equity rich balance sheet and 120 Tln Pesos of own assets. the 156 HSBC branches were centered out of Panama. Mexico remains one of the focus businesses for HSBC as a growing emerging economy. Davivienda made a QIP of $394 mln to make the purchase earlier in the year. HSBC bought into Mexico 10 years ago, witht he purchase of $22 bln in assets, 1400 branches and 4000 ATMs from GF Bital for $1.1 bln a t that time (2002)
In Asia HSBC is concentrating in China, India and Singapore growth and consolidation in Hongkong. In Korea, KDB is discussing acquiring the bank’s lending and retail assets as it concentrates on trade finance, comml lending led growth in Asia and private banking globally currently.
HSBC is a small player in the country, where the retail banking industry is dominated by four big banks: Kookmin Bank of KB Financial Group, Woori Bank of Woori Finance Holdings, Shinhan Bank of Shinhan Financial Group and Hana Bank of Hana Financial Group. HSBC’s Korean unit had 11 branches with assets totaling 30.02 trillion won ($25.6 billion) as of the end of June, while Korea Development Bank, a key banking unit of KDB Financial, has 64 branches in Korea.
The bank may build more strengths into its European transaction banking nad commercial lending as well after the ring fencing dispensation allowed it to fend with extra capital surcharges on local UK assets or those influencing bank deposits of the UK bank
The $1 bln sale to First Niagara completes integration by May after anti trust action is completed in losing branches in the area to key Bank, the other bidder.
The bank has surprisingly warned of the breakdown of the Euro with a $5.5 bln net exposure ($8 bln gross)to Europe when last disclosed in December 2011. While local indian competitors are flush with credit and slow demand is taking its toll, local problems in China banks’ balance sheets and Europe’s deleveraging has hit European banks’ operations in the region troubling the ASEAN credit markets with rate hikes of up to 50% in the second half of 2011 While Postbank and HSBC have booked out $400 mln and $600 mln on Greek exposure, BNP took itself to the cleaners with a $1 bln writedown in Q4 alone.
Kaber Mclean moves from the Global Banking and markets desk of HSBC Asia to head operations left in Japan after teh sale of the small Private Banking unit