HSBC Said to Weigh Selling Latam Client Assets to Santander

  • Sale would involve $4 billion to $6 billion of client assets
  • Santander may use purchase to boost Latin American growth

HSBC Holdings Plc is weighing the sale of a portfolio of Latin American client assets that are managed in Switzerland to Banco Santander SA as the British lender restructures its private bank, according to people familiar with the matter.

Santander is interested in the portfolio, which could include $4 billion to $6 billion of assets under management, as a way to boost growth in Latin America, said the people, who asked not to be identified because the talks are private. The deal hasn’t been completed and both banks could still decide against the transaction, said the people.

HSBC last year agreed to pay 40 million Swiss francs ($40 million) to close an investigation by Geneva prosecutors into allegations of money laundering at the Swiss private bank. The probe stemmed from a list of clients stolen by former employee Herve Falciani in 2008, who shared the information with authorities in France and sparked tax probes around the world.

HSBC’S Chief Executive Officer Stuart Gulliver unveiled a strategy last year to shrink the bank’s sprawling operations and reduce annual costs by $5 billion, pledging to cut 25,000 employees and lower the lender’s regulatory capital burden. Santander reported second-quarter earnings on Wednesday, saying that about 37 percent of its underlying first-half profit came from Mexico and South America.

Santander and HSBC declined to comment on the potential deal.

HSBC’s profitability in recent years has been hit by a series of misconduct fines over allegations of employees manipulating currency markets and aiding money launderers. HSBC appointed Rothschild to help restructure its private bank by selling off portfolios, the Financial Times reported last year.

Gulliver, Chairman Douglas Flint and former Chairman Stephen Green were questioned by U.K. lawmakers after the tax evasion scandal. Falciani was indicted on charges of industrial espionage and violating bank secrecy laws by the Swiss Attorney General’s office in 2014, which conceded that he has been sometimes “celebrated as a hero abroad.”

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