HSBC Takes Full Control of German Unit With Landesbank Deal

(Bloomberg) --

HSBC Holdings Plc is taking full control of its German business as Europe’s largest lender restructures its global operations in smaller markets, and targets Asia for growth.

The bank will acquire an 18.66% stake in HSBC Trinkaus & Burkhardt AG from Landesbank Baden-Wuerttemberg, a regional lender in the south of Germany, according to statements by the banks on Monday. They didn’t disclose a price.

HSBC is pivoting to Asia and planning 35,000 job cuts amid sluggish revenue in its other markets, especially in continental Europe, though the coronavirus pandemic has put key parts of that program on hold. Net profit in HSBC’s German unit fell almost 17% last year to 98 million euros ($107 million) after the bank recorded a rise in loan impairments.

HSBC Trinkaus & Burkhardt had total assets of 26.6 billion euros ($29 billion) and employed more than 3,000 people at the end of last year. It warned in February alongside its full-year results that earnings in 2020 would likely remain “adversely affected” because of the difficult economic backdrop.

HSBC will hold 99.33% of the registered share capital after the deal closes, and plans to squeeze out remaining investors. LBBW said the stake it sold in the business was “a purely financial investment,” while London-based HSBC declined to comment further.

The bank makes the majority of its revenue and profit in Asia, and announced its revamp in February after pressure from investors to revamp European and U.S. divisions that have held back its performance.

HSBC’s planned sale of its French retail bank could take 4,000 to 8,000 workers off its payroll, a person with knowledge of the matter said in October. The lender is also planning to partially exit stock trading in other Western markets, including Germany, the U.S. and the U.K., Bloomberg News had reported.

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