HSBC share price: Bank enters exclusive talks with Bradesco over Brazilian unit

on Jul 21, 2015
Updated: Oct 21, 2019

HBC Holdings Plc (LON:HSBA) has entered into exclusive talks with Banco Bradesco SA for the sale of its Brazilian unit, Reuters reported yesterday, citing an unnamed source with knowledge of the matter. According to the report, if HSBC accepts Bradesco’s offer, a deal could be announced before the end of the month. The source said that the bid was worth 12 billion reais ($3.75 billion), which is 1.2 times the book value of the unit, HSBC Bank Brasil Banco Múltiplo. It is unclear whether Bradesco will pay in cash for the unit.

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Reuters said it could not reach representatives at Bradesco for comment, while a Sao Paulo-based spokesman for HSBC declined to comment. While the news hasn’t been officially confirmed, the information coincides with earlier reports suggesting that Bradesco was among the suitors for the unit as well as one report in particular last month, which suggested that Bradesco was close to make a binding offer for HSBC Bank Brasil. It attributed the information to Bradesco’s chief executive officer Luiz Carlos Trabuco.

In May, HSBC CEO Stuart Gulliver revealed that the UK bank intended to sell its operation in Brazil as part of its drive to simplify its structure and sharpen its focus on its core business. Due to slow asset growth, HSBC Bank Brasil has been unable to gain enough scale to win market share. As of 31 March, the unit had assets of about 170 billion reais.
In today’s trading, HSBC shares were up 0.1 percent at 587.30p, as of 08:37 BST. The stock has fallen 3.5 percent since the start of the year and the company’s market capitalisation currently stands at £115.1 billion.
As of 10:04 BST, Tuesday, 21 July, HSBC Holdings plc share price is 587.20p.


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