FINANCIAL SERVICES | Staff Reporter, Hong Kong

HSBC to part with subsidiaries in four South American countries

HSBC Holdings is in talks on a possible sale of its operations in Colombia, Paraguay, Peru and Uruguay as part of its global strategy to boost profitability and cut costs.

While HSBC did not explain its move further, it said in a brief statement to the Hong Kong stock exchange it will make a further announcement "if and when appropriate."

Latin America is HSBC’s third largest market after Asia and Europe. Its profit before tax from Latin America rose 21% to US$2.3 billion last year.

HSBC Chief Executive Stuart Gulliver last year announced the bank would reassess its global businesses and slash 30,000 jobs. The bank wants to focus more on attracting wealthy customers and will withdraw from countries where it either is too small or inefficient.

This week, HSBC said its first-quarter net profit plunged 39% to US$2.58 billion from $4.15 billion year-on-year due to an accounting charge on the value of the bank's debt.

Excluding this charge, however, underlying profit before tax rose 25% to $6.78 billion from $5.41 billion year-on-year boosted by strong performance from its investment banking division and emerging-market operations.

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