The FINANCIAL -- HSBC Holdings plc (‘HSBC’) has entered into an agreement to sell its entire business in Brazil, comprising HSBC Bank Brasil S.A – Banco Multiplo and HSBC Servicos e Participacoes Ltda (collectively ‘HSBC Brazil’), to Banco Bradesco S.A (‘Bradesco’) for an all cash consideration of US$5.2bn (‘the Transaction’). This represents a price to tangible book value multiple of 1.8x based on 30 June 2015 accounts. As at the completion of the Transaction, the purchase price is subject to adjustment to reflect the movement in the net asset value of the business between 31 December 2014 and completion.
Progress in executing HSBC’s strategy
The sale of HSBC Brazil represents a significant step in HSBC’s stated goal to optimise its global network and reduce complexity, outlined during the HSBC Investor Update on 9 June 2015.
The Transaction will also be a key contributor to the Investor Update action to reduce Group RWAs, accounting for c.US$37bn of the overall c.US$290bn planned reduction, enabling future redeployment of RWAs to support growth opportunities.
Commenting on the Transaction, Stuart Gulliver, Group Chief Executive, said: “We announced at our Investor Update on 9 June that we were targeting a series of actions to generate increased value for shareholders. I am pleased to be able to announce today a transaction which achieves both a solid financial outcome and swift delivery of one of our stated actions.”
HSBC is pleased to be working with Bradesco on this Transaction, given its leading franchise in the Brazilian market and commitment to HSBC staff and customers, according to HSBC Group.
The Transaction is subject to regulatory approval.
HSBC plans to maintain a presence in Brazil to serve large corporate clients with respect to their international needs.