HSBC to sell Brazilian business

HSBC sell Brazilian business

It has been announced this week that HSBC will sell its Brazilian business for $5.2 billion after talks of the bank shifting resources to the Asian market last month. Despite the sell, the bank still has 266,000 employees in 73 countries and territories.

HSBC beat analyst expectations by reaching a 10% profit rise so far this year, totalling $13.6 billion from January to June. These expectations were also shattered as the Brazilian business was sold for a higher price than first predicted, according to the Financial Times.

CEO Stuart Gulliver explained that the bank expects to do well this year. “We are executing the actions that we announced at our investor update in June and our focus is on making significant progress during the remainder of the year,” Gulliver said as quoted in the FT.

However, the FT also reveals that when the results of the half-year were calculated, legal proceedings and regulatory measures accounted for $1.43 billion. Alongside this, costs of up to $750 million were needed to cover foreign exchange market manipulation and $91 million for mis-selling payment protection insurance.

These profits were strengthened by successful equity market volatility in Asia as analyst at Bernstein, Chirantan Barua explains. “The star in the quarter was equities which saw its best performance ever, up 32 per cent quarter on quarter and 155 per cent year on year – this must have been off the volatility in Asia,” Barua said according to the FT.

As well as this, Asia contributed to more than 60% of the profits according to Gulliver and half of the $180-$230 risk weighted assets would be reinvested in Asia, while the other half in Europe, Middle East and Latin America.

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