HSBC Holdings Plc is selling its Kazakhstan unit for $176 million to Halyk Savings Bank as Europe’s biggest lender focuses on its most lucrative markets.
The deal, expected to completed in the fourth quarter, is based on a net asset value of $160 million for the unit, London-based HSBC said in an e-mailed statement today. HSBC’s Kazakh and international investment-banking clients will be served by offices outside the country, Donal McCarthy, a bank spokesman, said by e-mail.
HSBC, which gets most of its profit from Asia, is focusing on the most profitable markets amid increased regulation and compliance costs. While Chief Executive Officer Stuart Gulliver has closed or sold 63 businesses since 2011, costs are running above his target of about 50 percent of revenue and return on equity, a measure of profitability, is still short of his goal.
The acquisition by Kazakhstan’s second-biggest lender will attract “new customers in the retail segment and among large national companies and large international companies operating in Kazakhstan,” Halyk CEO Umut Shayakhmetova said in a separate statement.
Consolidation is accelerating in Kazakh banking five years after the Samruk-Kazyna sovereign wealth fund bailed out lenders rocked by a credit squeeze, bringing BTA Bank, Alliance Bank and TemirBank under state control. Kazkommertsbank, the nation’s biggest by assets, said on Dec. 23 it plans to merge with BTA after reaching a deal for the government’s stake. Halyk halted talks to buy the government’s BTA shares in November after completing due diligence.
HSBC opened its first office in Kazakhstan in 1998 and acquired Royal Bank of Scotland Plc’s consumer business there almost four years ago.
Halyk’s shares gained 2.2 percent to 42.48 tenge.