HSBC has entered an agreement to sell parts of its Latin American business to $400 million in cash, subject to the usual regulatory approvals.

Following
its announcement last week that it was looking to sell businesses in
Colombia, Peru, Uruguay and Paraguay,HSBC confirmed this move today,
saying it has entered an agreement with the Colombian banking entity
controlled by the Gilinski Group, Banco GNB Sudameris.

The sale amounts to a total consideration of $400 million in cash,
subject to adjustment to reflect the net asset value in each of the
businesses at completion.

The sale of the businesses is “part of the ongoing reduction
in exposure to retail banking in markets where they have no critical mass”,
said Christopher Wheeler, analyst at Mediobanca. He estimates that the firm has
announced 29 closures/sales since last May’s Investor Day presentation.

The agreement is subject to regulatory approvals in each
jurisdiction, as well as other conditions. The sales of the businesses
in Colombia and Peru are expected to complete in the fourth quarter of
2012 and the sales of the businesses in Uruguay and Paraguay are
expected to complete in the first quarter of 2013, HSBC said in a statement.

At December 31, 2011, the businesses to be sold had 62 branches across
the four countries and a gross asset value of $4.4 billion.

HSBC’s statement today, like its earlier statement last week, did not
elaborate on whether private banking services will be affected,
however; as disclosed on its own website, HSBC’s private bank caters to
Latin American clients. Several items refer to case studies where the
private bank has helped clients in the region.

As part of a streamlining drive to cut costs and focus on the most
important markets, chief executive Stuart Gulliver intends to intensify
focus on markets such as those of the Asia-Pacific region.