HSBC share price: Company receives bids for Turkish unit

HSBC Holdings Plc (LON:HSBA)had shortlisted three bidders for a sale of its Turkish unit, Bloomberg reported yesterday citing three unnamed sources with knowledge of the matter. The newswire also said that the UK bank had hired advisers from Citigroup to oversee the sale process.

According to the sources, HSBC received binding bids for the unit from French bank BNP Paribas SA, ING Groep NV of the Netherlands and Bahrain-based Arab Banking Corp. Two of the sources suggested that the unit might be valued at about $500 million. The reported bidders, as well as HSBC and Citigroup had all declined to comment on the story, Bloomberg said.
ING and BNP already have operations in Turkey, so an acquisition of HSBC Bank AS would present an opportunity for them to increase their presence in the country. According to data from the Banks’ Association of Turkey, HSBC Bank AS is the 13th largest lender in the country, with 33.6 billion liras ($12.5 billion) of assets as of March 31.
However, the unit has also been the most unprofitable bank in Turkey in the first quarter with a loss of 32 million liras. This makes it an easy target for disposal, as part of HSBC’s push to cut costs and simplify its structure. Earlier this month, HSBC’s chief executive officer, Stuart Gulliver said that the bank’s operation in Turkey and Brazil would be sold as part of the restructuring.
In today’s trading, HSBC shares were up 1.1 percent at 577.13p, as 11:25 BST. The stock has fallen 5.2 percent since the start of the year, trimming the company’s market capitalisation to £113.3 billion.
As of July 01, 2015, the consensus forecast amongst 30 polled investment analysts covering HSBC Holdings plc had it that investors should hold their position in the company. This consensus estimate has been maintained since November 26, 2014 the sentiment of investment analysts deteriorated from “outperform”.
As of 13:22 BST, Thursday, 02 July, HSBC Holdings plc share price is 577.90p.