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HSBC to Sell Japan Private Banking Business

HSBC Holdings Plc, Europe’s largest bank by market value, agreed to sell its Japanese private banking business to Credit Suisse Group AG.


The sale of the unit, which had assets valued at $2.7 billion as of Oct. 31, is expected to be completed in the second quarter of next year, London-based HSBC said in a statement today without disclosing the price.

Chief Executive Officer Stuart Gulliver is reversing HSBC’s expansion over the past two decades, selling assets and cutting jobs as the European debt crisis saps profit and global regulators boost capital requirements. The bank in July agreed to sell almost half its U.S. branches to First Niagara Financial Group Inc. for about $1 billion and has also sold part of its Russian consumer banking unit.


Shares of HSBC rose 2.3 percent to HK$59 at 3 p.m. in Hong Kong, outpacing the 1.3 percent gain in the city’s benchmark Hang Seng Index. The stock has declined 26 percent this year.


HSBC is seeking buyers for its non-life insurance assets and may consider selling regional units of the business separately, three people familiar with the matter told Bloomberg News in October. The sale may value the non-life operations at

$1 billion to $1.5 billion, they said, asking not to be identified because the sale process is private.


HSBC aims to cut as much as $3.5 billion of expenses over the next two years as it tackles wage inflation in faster- growing economies and prepares for stricter capital rules, the bank said in May.


Japan’s high-net-worth wealth pool of $4.63 trillion increased 6.97 percent in 2010 from the previous financial year, according to Scorpio Partnership, an adviser to wealth management institutions and family offices. The number of millionaire households increased by 12.2 percent in 2010 to about 12.5 million, led by the U.S., followed by Japan, the Global Wealth Report by Boston Consulting Group in May shows.

Source: Bloomberg