By Max Colchester and Rogerio Jelmayer
HSBC Holdings PLC has hired advisers to pitch a large chunk of
its Brazilian unit to prospective buyers, according to people
familiar with the matter.
The bank hired Goldman Sachs to gauge the interest of local
lenders including banking giants Banco Bradesco and Banco Santander
SA for most of its Brazil unit, these people say.
HSBC declined to comment. Goldman Sachs didn't immediately
return calls for comment.
The move comes just over a month before HSBC is expected to
present a refined strategy aimed at appeasing critics who say the
bank is too big to manage. It is unclear how much of the Brazil
unit, which employs 21,000 people, is up for sale, these people
say. HSBC's Latin America division, which also includes Mexico and
Argentina, suffered a difficult 2014 with adjusted profit before
tax dropping 50% as the Brazilian economy slowed. Meanwhile costs
rose in the region, impacted by union agreed salary hikes and
inflation.
HSBC runs the seventh largest bank in Brazil with a 2.7% market
share, in terms of assets. HSBC Brazil swung to a loss of around
GBP200 million ($306.8 million) in 2014.
The prospect of buying banking assets on the cheap has sparked
attention of some Brazilian lenders. After spending years focusing
on organic expansion, Brazilian banking giant Banco Bradesco said
Wednesday that it is open to evaluating acquisition opportunities
if one emerges, according to the head of the bank's investor
relations Luiz Carlos Angelotti. However, Mr. Angelotti notes there
are no ongoing deal talks at the moment.
Earlier this week, the head of the Brazilian unit of Spanish
bank Banco Santander SA said it plans to focus on organic growth,
but it is open to acquisitions. "Our strategy is to expand
organically, however, we will analyze all opportunities that
arise," Jesus Zabalza, chief executive of Santander Brasil SA, said
in a conference call with reporters. "We are looking after the
profitability of our operation. Regarding potential acquisitions,
from my side, there is nothing on the table," said the
executive.
HSBC is also weighing a retreat from Turkey, according to people
familiar with the matter. Come the investor day, its Mexican and
U.S. unit are expected to be spared the ax but may come in for
heavy restructuring, according to people familiar with the
matter.
Write to Max Colchester at max.colchester@wsj.com and Rogerio
Jelmayer at rogerio.jelmayer@wsj.com
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