HSBC Sells US Wealth & Tax Advisory Services

Christopher Owen

3 January 2008

HSBC USA has signed an agreement to sell Wealth & Tax Advisory Services USA to participating WTAS managing directors in a management buy-out for up to $65.9 million. WTAS provides tax advisory services in the US to high net worth individuals including HSBC Private Bank customers. The transaction will enable WTAS to pursue a broader expansion strategy. Under the agreement, HSBC will receive $5 million in cash and deferred notes with a principal amount totalling $60.85 million. HSBC also has an option to acquire 19.9 per cent of the equity of WTAS. Chris Meares, HSBC Private Banking chief executive, said: "Our focus is on developing our core private banking activities in both developing and developed markets using HSBC's unique distribution network." The disposal of WTAS will also remove potential reputational risk over tax planning issues in the US where several banks and accountancy firms are currently enmired with the US government over the sale of legally questionable tax shelters to wealthy clients.