HSBC Reportedly Looking Into Divesting Canadian Operations

HSBC (NYSE: HSBC) said in a statement that it is currently reviewing strategies for its wholly-owned subsidiary in Canada, including a potential sale of a 100% stake.

“We are currently reviewing our strategic options with respect to our wholly owned subsidiary in Canada,” the company said in a statement. “HSBC regularly reviews its businesses in all its markets.”

According to a person familiar with the situation, the lender has directed investment bankers at JPMorgan Chase & Co. to feel out bids for HSBC Bank Canada.

The announcement comes amidst a contentious call by its largest shareholder, Ping An Insurance Group, to split the company. HSBC has pushed back against the Chinese insurer, claiming that there’s little merit in spinning out its Asian operations.

According to Bloomberg Intelligence, selling the Canadian unit could net roughly US$10 billion.

Despite being a minor percentage of HSBC’s overall business, Canada was the third largest contributor to the company’s commercial banking earnings in 2021, after only the United Kingdom and Hong Kong and ahead of markets such as mainland China, the United States, and India.

The British lender has been operating in Canada since 1981 and is currently the seventh largest bank in the country, with over 130 locations nationwide.

HSBC is in the midst of its own turnaround, which is focused on strengthening its position in Asia, particularly in wealth management, while eliminating operations that are no longer considered relevant. The bank has already sold assets in the United States, France, and Greece.

HSBC last traded at US$26.62 on the NYSE.

Information for this briefing was found via Financial Post. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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