HSBC buy-and-sell tactics playing out in tandem

Agencies and staff reporter

Executives of HSBC (0005) expect to increase the amount of acquisitions the banking giant makes in the coming years - especially around Asia - after spending the past six months fighting calls from its largest shareholder to split up.

Further disposals are also expected but will likely be matched by purchases, according to one source.

Such a shift underlines the bank's changing stance to deal making. Since the global financial crisis HSBC has made few acquisitions while exiting more than 20 countries and selling dozens of businesses - even some that were previously seen as core to its operations.

And disposals will not stop.

HSBC said last week it was running the rule over a sale of its Canadian business that could be worth about US$10 billion (HK$78 billion).

The decision to look at selling up in Canada came after several expressions of interest in the business. It follows HSBC's disposal last year of its French and US retail operations, and chief executive Noel Quinn hinted last month at more of the same. He said more transactions were "in flow."

A push to break up the London-based banking group by Ping An Insurance (2318) has focused on the value of HSBC's sweeping global network.

To the Chinese insurer, HSBC's worldwide operations are a millstone around the neck of its profitable Asian business.

On that, the past couple of years have seen HSBC announce the purchase of an Indian asset manager, a Singaporean insurance business, the remaining 50 percent in HSBC Life Insurance in China and an increased stake in its Chinese securities joint venture.

This fits with HSBC's Asia pivot as it shifts billions of US dollars of capital from west to east, predominantly to China and India, to capitalize on the region's rising economies.

Additionally, HSBC Global Private Banking announced yesterday that it has launched its business in Chengdu and Hangzhou to try to capture a bigger share of the mainland market as uncertainties cloud the potential for China's wealth growth.

The bank also said it plans to explore opportunities in China's southwest region. Its existing branches are located in eastern areas where more high-net-worth individuals live.

It has already launched private bank services in Beijing, Shanghai, Guangzhou and Shenzhen.

Shares of HSBC in Hong Kong dropped 1.6 percent to below HK$40 yesterday.