HSBC's sale of its Brazil business took one step closer to reality last night, after the deal was approved by Brazil's competition agency.
The banking giant intends to sell its entire business in Brazil – which consists of HSBC Bank Brasil S.A – Banco Multiplo and HSBC Servicos e Participacoes Ltda – to Banco Bradesco, the fourth largest bank in Brazil, with 25.6m account holders, 91,000 employees and 4,509 branches.
The two companies initially agreed on the deal in August 2015 for cash consideration of $5.2bn (£3.6bn).
At present, HSBC is the sixth largest bank in Brazil with around 4.6m customers, roughly 21,000 employees and 851 branches.
"The sale of HSBC Brazil represents a significant step in HSBC's stated goal to optimise its global network and reduce complexity," HSBC wrote in a statement.
After the sale completes, HSBC still plans to maintain a presence in the country by working with a number of large corporate clients.
HSBC has also revealed that, for accounting purposes, the sale is likely to be treated as a net gain of around $0.6bn, or a net loss of about $1.7bn, once foreign exchange losses are factored in. The difference is mostly caused by the accounting treatment of goodwill.
The official publication of the decision from Brazil’s competition agency, the Brazilian Administrative Council for Economic Defence, is expected on or before next Tuesday. However, HSBC revealed the deal had been unanimously approved in a statement last night.
This is not the first big announcement HSBC has made regarding its global makeup so far this year. Back in February, the bank revealed that it would be keeping its headquarters in London, after months of uncertainty and a lengthy review process which could have seen it shipping its head office out to Hong Kong.