HSBC agrees to sell stake in Chinese insurer Ping An to Thailand’s Charoen in $9.4bn deal

British banking and financial services group HSBC Holdings Plc (LON:HSBA) on Wednesday announced a HKD72.74bn (USD9.4bn/EUR7.2bn) agreement for the sale of its 15.57% in Chinese insurer Ping An Insurance (Group) Company of China Ltd (HKG:2318).

The buyer is Thai diversified group Charoen Pokphand Group Company Limited (CP Group) which is carrying out the deal through indirectly fully-owned units All Gain Trading Limited, Bloom Fortune Group Limited, Business Fortune Holdings Limited and Easy Boom Developments Limited.

Under the terms of the transaction, HSBC will transfer a first tranche of 256.7m Ping An shares, or 20.8% of the shares, to the buyers on 7 December for HKD59.00 apiece in cash, while the rest of the stock will be delivered at the same price per share after securing the approval of China Insurance Regulatory Commission (CIRC) in January 2013, the vendor said.

HSBC said the sale is part of its strategy of delivering long-term value to shareholders. It expects the disposal to boost its core Tire 1 capital ratio by some 0.5% and the total capital ratio by around 1% based on ratios on 30 September 2012. The vendor plans to use the funds from the divestment to support the group’s overall strategy, HSBC said.

The buyer will finance the deal with cash and a debt facility from the China Development Bank Corporation (CDB).

HSBC in talks to sell stake in Chinese insurance firm Ping An

British banking and financial services group HSBC Holdings Plc (LON:HSBA) on Monday said it was negotiating the sale of its 15.57% stake in Chinese insurer Ping An Insurance (Group) Company of China Ltd (HKG:2318).

The statement followed a report by the Hong Kong Economic Journal about ongoing talks over a disposal. According to the paper, Thai billionaire Dhanin Chearavanont’s Charoen Pokphand Group could be a potential buyer.

The stake’s value is around USD9.3bn (EUR7.3bn) Reuters said, while Bloomberg reported it was worth USD9.5bn before the opening today in Hong Kong.

HSBC warned that the current discussions were not certain to result in a sale.
The British group took 10.1% in Ping An in 2002 for some USD600m and spent another USD1.1bn in 2005 to increase its stake in the Chinese insurer to 19.9%. This interest fell to 15.6% in 2010 when HSBC refused to participate in a rights issue at Ping An.

HSBC has been selling non-core operations since it announced a plan in May 2011 to increase profitability. From the start of last year to the date, the bank has announced 41 disposals and closures.

UPDATE 2: No problems with HSBC’s internet banking system

Banking giant HSBC has contacted Financial News and confirmed that there currently are no problems with the bank’s internet banking system.

Nigel Hinshelwood, UK Retail Bank Chief Operating Officer at HSBC said: “There are no problems with payments going through our internet banking system. All payments made are being processed, and within normal processing times.”

Earlier today, an HSBC business banking client told Financial News that the bank was unable to process internet banking payments and any payments that had been made this morning were currently trapped ‘in-limbo’ with HSBC unable to give customers any guidance on when the payments would be processed.

The source added that this was the explanation given by the designated HSBC relationship manager. The source contacted Financial News later and said that payments were again being processed around midday today.

The earlier Financial News story follows:

HSBC Bank plc have experienced an internet banking failure today (17 September, 2012).  The bank is currently unable to process internet banking payments and any payments that have been made this morning are currently trapped ‘in-limbo’ with HSBC unable to give customers any guidance on when the payments will be processed.

Customers are being told not to try and make any payments from their online banking until the problem has been resolved.  Members of the HSBC call-centre have ‘promised’ cutomers that the payments will go out today, although without any timescale being offered customers are quite correctly concerned at whether the bank will be experiencing the type of outage that NatWest and Ulster Bank experienced earlier in 2012.

What is is for certain is that this is another embarrassing online banking failure for a UK Bank and further shakes the now fragile confidence that the British public has in it’s financial institutions.

HSBC considers sale of its stake in Vietnamese insurance group Bao Viet

British banking and financial services group HSBC Holdings plc (LON:HSBA) said on Thursday it was reviewing strategic options for its 18% interest in Vietnamese insurer Bao Viet Holdings including a potential sale, confirming media speculation that it could be seeking buyers for the stake.

According to a Reuters report from July citing sources, HSBC was discussing a potential deal worth some USD400m (EUR324m) for its Bao Viet stake with Sumitomo Life Insurance Company.

One of the sources informed on the matter, told the news agency that although the stake’s market value is only USD250m, the British bank targets a high premium for it, because of Bao Viet’s good market position and the possiblity for the buyer to increase its ownership in it in the future.

Other interested parties had a look at Bao Viet, the sources also said, without naming any.

For its part, HSBC, which paid a total USD360m to build the 18% in Bao Viet in 2007 and 2009, said it would give details on the strategic review for the stake when appropriate.

The interest is held by HSBC Insurance (Asia Pacific) Holdings Limited, HSBC said.
The UK bank has already shed 28 businesses, reduced 15,000 jobs and released risk-weighted assets worth USD55bn under a three-year recovery plan.

In March 2011, Bao Viet had over 5,200 employees, more than 30,000 consultants and some 130 branches, according to its website.

For more on HSBC’s asset disposals, click here.

HSBC sells ship brokerage and consultancy arm to management

British banking and financial services group HSBC Holdings plc (LON:HSBA) said its fully-owned unit HSBC Bank plc would shed ship broking and consultancy services provider HSBC Shipping Services Limited to the business’ management, marking a further step in the implementation of the group’s strategy.

Shipping Services, with USD6.8m (EUR5.5m) worth of consolidated gross assets as at 30 June 2012, will change name to Hartland Shipping Services Limited after the deal, which will be carried out through a new firm set up by the buyers, HSBC said without disclosing financial terms.

The group will seal a consultancy accord with Hartland for the sold business to provide global shipping-related valuation and consultancy services to HSBC Group, the vendor explained.

After this disposal, HSBC will continue to offer non-broking and associated consultancy services to the shipping industry.
The deal is seen to wrap up in the fourth quarter of this year.

The British group, with operations in 85 countries globally, is looking to increase focus on rapidly developing markets in Asia.
Its CEO Stuart Gulliver initiated a restructuring process in 2011, with some 28 deals announced since then aimed at eliminating risk-weighted assets from the group’s balance sheet.

The three-year restructuring resulted in 15,000 job cuts and the exit from sub-scale markets and operations with the view of simplifying the business and reducing costs.

For more on HSBC’s asset disposals, click here.

 

British banking giant HSBC continues asset disposals

British banking group HSBC Holdings Plc (LON:HSBA) said today it is selling its entire Hungarian unit, HSBC Credit Zrt, to local venture capital firm Central-Fund Kockazati Tokealap without disclosing the purchase price.

The transaction will be carried out by the group’s wholly-owned subsidiary HSBC Europe (Netherlands) BV. It has already received the needed regulatory green light and HSBC expects to close the divestment on 6 August 2012.

On 10 October 2011, the British group announced it had agreed to sell about 94% of its Hungarian consumer finance portfolio to Cofidis Magyarorszagi Fioktelepe. As part of that deal, Cofidis also took on the employees that were managing the portfolio at the time.

As at the end of June 2012, HSBC’s Hungarian unit had gross assets of USD5.28m (EUR4.3m).

London-based HSBC has some 6,900 offices in more than 80 countries and territories in Europe, North and Latin America, the Middle East and North Africa as well as in the Asia-Pacific region. The group had assets of about USD2.65trn at 30 June 2012.

Last week, the group said it had reached a USD242m deal to dispose of its 44% interest in a card processing joint venture in the Asia-Pacific region to partner Global Payments Inc (NYSE:GPN), as part of its strategy to divest non-core operations.

For more on HSBC’s asset disposals, click here.

HSBC reports profit growth for first half, makes $2bn provision for compensation and US matters

HSBC Holdings plc (LSE:HSBA), the bank’s parent company, said that it had generated pre-tax profit of USD12.7bn in the six months to the end of June, up from USD11.5bn a year earlier.

Profit was boosted by USD4.3bn of gains from business disposals, including the sale of HSBC’s Card and Retail Services business and 138 branches in the US. The results also included USD2.2bn of adverse movements in the fair value of the bank’s own debt attributable to credit spreads, compared with an adverse movement of USD143m in the first half of 2011.

Underlying profit declined 3% to USD10.6bn. HSBC revealed that it had set aside USD1.3bn for compensation regarding the mis-selling of PPI and interest rate hedging products in the UK and USD700m to cover “certain law enforcement and regulatory matters” in the United States.

“We apologise for our past mistakes in relation to anti-money laundering controls,” said group chief executive Stuart Gulliver, adding that it is a priority for the bank’s senior management to build on steps already taken to manage risk and ensure compliance more effectively. Group chairman Douglas Flint also said that he was “very sorry” for mistakes made by HSBC in the past.

Group revenues fell to USD29.6bn, from USD31.1bn in the first half of last year. On an underlying basis revenues were 4% higher than in the first half of 2011 thanks to strong growth in emerging markets, particularly in Hong Kong and the rest of the Asia-Pacific region and in Latin America.

HSBC disposes of its take in Asian card processing venture for $242m

British banking group HSBC Holdings Plc (LON:HSBA) said on Friday that it had reached a deal to dispose of its 44% interest in a card processing joint venture in the Asia-Pacific region to partner Global Payments Inc (NYSE:GPN) for USD242m (EUR196.9m) in cash.

Under the terms of the agreement, HSBC’s wholly-owned subsidiary, The Hongkong and Shanghai Banking Corp Ltd, will sell its entire 44% stake in Global Payments Asia-Pacific Ltd (GPAP) to the US electronic transaction payment processing specialist. Global Payments holds the rest of the shares in GPAP after participating in the inception of the JV in 2006.

The move is part of HSBC’s strategy to divest non-core operations. It is awaiting regulatory clearance and the agreement of the terms of certain ancillary commercial contracts. Completion is scheduled for the second half of the year.

The parties have agreed that following closing, GPAP will act as the preferred strategic provider of card merchant acquiring services for HSBC in the Asia-Pacific region. The entity covers 11 countries and territories.

London-headquartered HSBC has about 7,200 offices in more than 80 countries and territories in Europe, North and Latin America, the Middle East and North Africa as well as in the Asia-Pacific region.

British banking giant HSBC used to launder Mexican drug money

UK’s largest bank HSBC was used to launder Mexican drug money, according to a new report by the Senate Permanent Subcommittee on Investigations, a Congressional watchdog responsible for investigating financial improprieties.

The investigation by the Senate reveals how weak controls at the bank left it vulnerable to being used to launder dirty money and suspicicious funds from Syria, Cayman Islands, Iran and Saudi Arabia are also understood to have been flushed through the bank, the BBC said.

The report also reveals the the US bank regulation authority, called the Office of the Comptroller of the Currency, failed to properly monitor the European bank.

HSBC has said it expects to be held accountable and that the bank will shoulder the responsibility and fix what went wrong.

“We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong,” HSBC said in a statement.

 

HSBC agrees to sell Greek equities brokerage

British banking group HSBC Holdings Plc (LON:HSBA) said it has sealed a deal to divest its Greek equities brokerage  HSBC Securities SA to a group of investors led by the business’ current managing director Nikos Pantelakis for an undisclosed sum.

In order to sell this subsidiary, HSBC will first need to obtain certain regulatory and other approvals. The transaction, which is scheduled for completion in the third quarter of the year, is in line with the group’s strategy, it explained.

The disposal is being carried out by HSBC Bank plc.

The Greek business offers equity broking services to local and foreign institutional customers, domestic retail clients as well as to HSBC’s institutional customers. It will continue to be one of the British group’s preferred brokers in Greece following the sale.

The unit’s gross assets were around EUR35.8m (USD45.1m) as at the end of April 2012.

London-based HSBC is a banking and financial services organisation with around 7,200 offices in more than 80 countries worldwide. At the end of March 2012, the group’s assets amounted to USD2.64trn (EUR2.1trn).

Last week, HSBC closed the disposal of its card acquiring operations in Malta to a local subsidiary of US-based Global Payments Inc (NYSE:GPN).

For more on HSBC asset sales, click here.