HSBC is set to announce some $30bn (£18.2bn) in asset sales as part of chief executive Stuart Gulliver’s strategic rebalancing of the bank.
Insiders have confirmed the $30bn figure to City A.M., which was estimated by Barclays Capital analyst Rohith Chandra-Rajan in a note to investors.
The sales will form part of implementing what Gulliver has called “a very disciplined approach to allocation of capital” so as to meet the bank’s 12-15 per cent returns target.
Investec analyst Gareth Hunt says that sales must form part of any strategic shift: “They need to sell in order to buy,” he said.
Details of the sales are not yet known, but BarCap’s Chandra-Rajan estimates that the lion’s share of the capital – some $25bn – will be raised by selling off retail assets in the US. Top of the list could be “the outsized US credit card business and a scaling back of HSBC’s US branch presence”.
The remaining $5bn could come from selling HSBC’s 16 per cent stake in Ping An, a Chinese insurer, says Chandra-Rajan. However, some think this unlikely, given the further growth potential of the Chinese market.
Other assets for the chop could include some of the bank’s IT hubs.