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HSBC is weighing a sale of its South African businesses as the lender focuses on Asian markets, according to people with knowledge of the matter.
The South African branch business and securities unit have drawn interest from bidders that include banks from the region as well as China and the United Arab Emirates, said the people, who asked not to be identified discussing information that isn’t public. The details of any potential deals have yet to be finalised and there is no guarantee that any transactions will go ahead, the people said.
HSBC declined to comment.
The London-based bank has been operating in Africa’s biggest and most developed economy since 1995. HSBC Africa’s principal activities are commercial banking, global banking and global markets, according to its website. The company recently sold its retail and business banking units in Mauritius to Absa, which means a sale of its South Africa business would see HSBC largely exit sub-Saharan Africa.
HSBC which has businesses in more than 50 markets, has been seeking ways to further cut costs and complexity under newly appointed Chief Executive Officer Georges Elhedery, similar to a plan embarked upon by Citigroup Inc. CEO Jane Fraser.
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Most recently, HSBC announced a revamp that would simplify its global banking business to make it look more like its bigger rivals. The consolidation of several of its industry-coverage units into five larger groups has been seen as the latest sign that the lender is preparing for a world where interest-rate cuts are likely.
Efforts are also underway to cut the bank’s expense bill, with moves to slow hiring and rein in travel and entertainment costs, Bloomberg News reported last month.
The lender has been strengthening its Asian roots in a strategic pivot that’s deepened over the past few years. It has disposed of major businesses in the West, including its French and Canadian operations, and has redeployed capital, in particular, to Southeast Asia and China.
