HSBC Holdings PLC (NYSE:HSBC) has decided to look for alternative strategies rather than pursuing the sale of its Turkish business. The European bank does not want to put the unit in a situation of a distressed sale. It decided to scrap the idea of selling the unprofitable unit, according to a Bloomberg report. The bank will now look to restructure the business and see how it can be revived, as market conditions do not favor selling units profitably.
Official Announcement Expected
HSBC is planning to announce its annual financial results on February 22, i.e. at the beginning of next week’s trading on Monday. The bank might take the opportunity to make an official announcement in respect to its Turkish operations at that point. The company’s officials were not ready to comment on media reports.
In December, ING Groep NV had aborted its intention of acquiring the European Bank’s Turkish unit. Those who were aware of the developments blamed regulatory issues for ING abandoning the process.
Part Of Global Plans
HSBC CEO Stuart Gulliver, presented a plan in June last year to shed some of the international network spreading across a three-year period. As part of it, the bank had to eliminate 25,000 of its workforce as a part of shutting down unprofitable ventures. As a result, the bank was planning to cut down its costs as much as $5 billion before the end of next year.
As part of the global plan, HSBC struck a deal to divest its Brazilian business for $5.2 billion to Banco Bradesco last year. Gulliver indicated recently that he sees the divestiture being completed in the first half of the current year. He also indicated that the company would provide an update to its investors on the divestiture from its Turkish business disposal next week, probably at the time of the annual earnings announcement.