HSBC Holdings PLC retreated back to its Asian roots Monday with an agreement to sell its Brazilian business for $5.2 billion, in the latest dismantling of HSBC’s former ambition to be “the world’s local bank.”
HSBC said it has entered an all-cash deal to sell the Brazilian unit to Banco Bradesco SA, leaving it with a rump Mexican business in the region that will increasingly be focused around North American trade. The bank in a June strategy update said it would pivot its business back to Asia, where its Hongkong and Shanghai Bank has been operating for 150 years.
The announcement came as HSBC reported a 4% fall in second-quarter net profit to $4.36 billion from $4.54 billion, reflecting higher operating costs and tax charges in the period. But a rise in revenue and lower bad loans pushed pretax profit higher in the three months to June 30, to $6.57 billion from $5.56 billion.