HSBC mulls over Canadian sale amid Pingan pressure

HSBC (0005) is considering selling its Canada business, one of the biggest international banking brands in the country, a bank official said yesterday, as it looks to beef up returns pressed for by its largest shareholder.

"We are currently reviewing our strategic options with respect to our wholly owned subsidiary in Canada," it said.

The review is at an early stage, the official said, and no final decision has been taken but one option would be a sale of the lender's 100 percent stake in HSBC Bank Canada.

The disposal would represent the latest in a series of divestments at HSBC, which once styled itself the "world's local bank."

HSBC said last May it would exit mass market banking in the United States, and in June likewise said it would sell its French retail unit as part of a plan to improve profits and fend off calls from Ping An Insurance (2318) to split off its Asian business.

Ping An in April began a campaign pressuring the bank to explore options, including listing its Asia business to increase returns. Ping An has said it is not an activist investor.

The HSBC news came as Swiss lender Credit Suisse saw its shares rise more than 3 percent in early trade yesterday, rebounding from a sharp selloff Monday amid market uncertainty over its restructuring program to stem a series of losses.

The bank saw its shares slide by up to 11.5 percent and its bonds hit record lows Monday before clawing back some of the losses amid concerns about the lender's ability to restructure its business without asking for more money.

Some analysts and industry sources said it had enough capital and cash to deal with any crises. One analyst said investors feared the bank's ability to deliver on a turnaround strategy, which it is due to reveal on October 27.

A broader market malaise is also likely adding to worries, they said. Global markets have been particularly fragile of late amid rising rate hikes, policy inconsistencies, recession fears and the war in Ukraine.