HSBC’s Thai retail banking business is rumoured to be up for sale, as part of a restructuring plan for its global retail operations. When asked if a sale was on the cards, a Hong Kong-based spokesperson said: “We do not comment on market rumour or speculation.”
Under chief executive officer Stuart Gulliver’s leadership, however, the bank has been trying to transform itself from an unwieldy, bureaucratic organisation into a leaner bank with a focus on profitability. In August, it said it would cut 30,000 jobs worldwide as part of the overhaul.
Since holding its strategy day in May, the bank has made it clear to investors that it plans to restructure its retail banking operations and that it will exit businesses that lack scale or are not sufficiently profitable. It plans to focus on its core commercial and global banking operations.
HSBC has two branches in Thailand with a total of Bt205.3 billion ($6.7 billion) worth of assets as of September 30, 2011 and it operates within a fiercely competitive market. Major domestic lenders such as Bangkok Bank, Siam Commercial Bank, Krung Thai Bank and Kasikornbank have the lion’s share in terms of retail deposits and their bank branches easily dwarf HSBC’s. Siam Commercial Bank alone has more than 1,000 bank branches in the country.
It is unclear who may be keen to buy HSBC’s retail business in Thailand, but speculation is that such a move would make sense for a regional player such as CIMB, which has ambitions to grow in Asia. When contacted, CIMB declined to comment.
It is also unclear how soon a sale could take place given the worsening flood situation in Thailand. However, HSBC has already taken definite steps to exit or dispose of retail businesses globally. In April, it closed down its Russian retail banking business and in August it announced the sale of its US card and retail services business (which was profitable but not strategically important) to Capital One Financial for up to $33 billion. A month later, in September, it sold its retail banking business in Chile. HSBC was also reportedly in talks with KDB Financial Group to sell its Korean retail business in October.
