HSBC (HSBA.L) has agreed to sell its retail banking operations in Bahrain to Bank of Bahrain and Kuwait (BBK) (BBKB.BH) as part of its global restructuring strategy. The deal, announced on Tuesday, will transfer retail loans, deposits, and accounts of around 76,000 customers to BBK, which is majority-owned by the governments of Bahrain and Kuwait.
The financial details of the transaction were not disclosed. The agreement does not include HSBC’s corporate and private banking businesses in Bahrain, which will remain under the bank’s operations.
HSBC’s Global Downsizing Strategy
HSBC has been cutting back on low-return consumer banking businesses worldwide to focus on more profitable markets. The bank has exited several retail banking sectors, merged some of its commercial and investment banking units, and restructured its leadership.
According to sources, HSBC recently laid off about 40 investment bankers in Hong Kong as part of its downsizing efforts. Last month, the bank also announced plans to shut down its mergers and acquisitions (M&A) and certain equities businesses in Europe and the Americas, reinforcing its pivot towards Asia. This marks one of the biggest reductions in HSBC’s investment banking operations in decades.
HSBC’s Financial Outlook
HSBC is set to release its full-year financial results on Wednesday. Reports suggest that the bank may announce annual cost savings of up to $1.5 billion, according to the Financial Times.
This move aligns with HSBC’s long-term goal of focusing on Asia, where it sees higher growth potential. The restructuring is part of a broader strategy to improve efficiency and profitability amid a changing global banking landscape.
