HSBC to boost capital significantly for local unit in 1Q12 - Gulliver

- Friday, September 23, 2011

HSBC to boost capital significantly for local unit in 1Q12 - Gulliver

HSBC (NYSE: HBC) will carry out a "significant" capital increase in its Brazilian unit in next year's first quarter to boost the local lender's retail and SME banking, investment banking and wealth management businesses, group CEO Stuart Gulliver told local daily Valor Econômico.

The unit, HSBC Brasil, was the UK banking giant's fourth largest earnings generator in 1H11 with US$637mn in pretax profits.

Gulliver said HSBC plans for its Brazilian unit to remain among its largest subsidiaries abroad, adding that the bank will focus on organic growth.

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HSBC is divesting its smaller and less profitable units in Latin America to strengthen its subsidiaries located in selected markets - namely, Argentina, Brazil and Mexico.

The strategy is in line with the global plan Gulliver announced earlier this year, which also includes US$2.5bn-3.5bn in cost savings and slashing 10% of its workforce.