HSBC has put its Global Asset Management wealth business up for strategic review which could lead to a sale of the business, according to sources involved in the process.
The arm, which manages $412.9 billion of assets, is being looked at as part of a global restructuring of the bank to focus on its core retail business reports Mark Foxwell.
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HSBC Global Asset Management operates in Europe, Asia-Pacific, North America, Latin America and the Middle East and employs more than 500 investment professionals.
One source said: "It’s being reviewed, there are several options on the cards. A sale is one but another is to separate the business as a standalone entity."
Last year HSBC was handed a $1.9 billion fine by US authorities for failing to maintain an effective programme against money laundering.
Since then HSBC has been broadly implementing what analysts call a "de-risking" of the bank and well as countering costs. So far HSBC has sold 54 businesses across the whole group to help improve profitability, as well as reduce exposures.
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By GlobalDataLatest moves include the withdrawal of wealth management products in Bahrain, Jordan and the Lebanon. It also tried to sell its private banking operations in Monaco earlier this year, but failed to find a buyer at an acceptable price.
In 2011 HSBC’s chief executive, Stuart Gulliver, laid out plans to cut costs by between $2.5 billion and $3.5 billion by 2013.
At an investor presentation in London, Gulliver said the bank ‘was not going to try to be all things to all people in all markets.’ He added that HSBC must allocate capital in a more disciplined way than in the past.
HSBC has come out of the global recession better than many of its peers, but an increase in regulation and tougher markets has caused the bank to pullout of non-core areas and look at selling assets.
