Luxembourg welcomes 60 finance firms because of Brexit

Luxembourg welcomes 60 finance firms because of Brexit
Luxembourg welcomes 60 finance firms because of Brexit

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Jeddah - Yasmine El Tohamy - DUBAI/LONDON: HSBC is considering selling its Turkey business amid concerns about the country’s volatile currency and economic outlook, sources familiar with the matter said.
As part of broader cost-cutting measures under interim Chief Executive Noel Quinn, the bank is also seeking to sell or shrink its business in some other markets, the sources said.
These include countries where it has small-scale operations that struggle to compete with local players, including Armenia, Greece and Oman, they said.
A spokeswoman for HSBC declined to comment.
HSBC will seek to sell its banking business in Turkey if it can find a local buyer, the sources said, adding that no final decision has yet been taken.
The bank’s retreat from Turkey, where it has operated since 1990, would be one of the biggest exits from a country it has made in recent years as it shrinks its once globe-spanning empire.
HSBC has already shrunk its presence from some 315 branches and around 6,000 staff in 2013 to around 80 branches and 2,000 staff as of September last year, according to data from the Banks Association of Turkey.
Turkey has been a problem country for HSBC in recent years as volatility in the lira and economic problems have hit its returns, with the bank flagging rising expected loan losses there in its 2018 annual report.
A currency crisis in 2018 cut the lira’s value by nearly 30%, brought on a brief but sharp recession, and prompted Ankara to clamp down on the financial sector with a series of new rules aimed at stabilizing the currency and kick-starting economic growth.
The lender previously attempted to sell its business in Turkey in 2015, Reuters reported at the time, with Dutch lender ING among the interested parties.
But the sale never went through, and the lender instead pursued branch closures and job cuts that saw it swing from a loss in 2014 and 2015 to a profit of 456 million lira ($77.02 million) in the first nine months of 2019.
Despite that improved performance, the risks from currency volatility and the economic situation mean HSBC still wants to exit, the sources said.
Interim CEO Quinn is expected to announce his cost-cutting measures when the bank reports annual results and its new strategy on Feb. 18.
Quinn is auditioning for the full-time CEO role under chairman Mark Tucker. He is tipped by insiders at the bank to get the job, although it could yet go to a surprise external candidate.
The bank is also shedding around 100 roles in its equities business as it scales back in continental Europe, Reuters reported earlier this month.

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