HSBC Holdings (HSBA.L) (0005.HK) said on Thursday it is considering a sale of its Vietnam insurance business in a deal which could fetch about $400 million for Europe’s biggest bank as it pushes to exit non-core operations globally.
Reuters reported last month that HSBC was looking for buyers for its 18 percent stake in government-controlled Bao Viet Holdings BVH.HM, the country’s top insurer, and is in talks with Japan’s Sumitomo Life over a potential deal.
“HSBC confirms that it is reviewing its strategic options with respect to its shareholding in Bao Viet Holdings. No decision has been made as yet and HSBC will make a further statement if or when appropriate,” it said in a statement.
The stake has a market value of $250 million, but HSBC is expecting a hefty premium due to Bao Viet’s market position and the potential to raise the ownership level at a later stage, a source told Reuters in July.
Unlisted Sumito Life is among Japan’s four biggest life insurance companies. Sources have told Reuters that more bidders could emerge.
HSBC has been pulling back from unprofitable markets and businesses as part of a three-year recovery plan. It has already sold 28 businesses, taken 15,000 staff of its payroll and released about $55 billion in risk-weighted assets under the plan.
The planned exit from Vietnam comes four months after it sold its global general insurance business to AXA SA (AXAF.PA) and Australia’s QBE Insurance Group Ltd (QBE.AX) for $914 million.