HSBC's Middle East division has agreed to sell its Pakistan operations to local lender JS Bank, for an undisclosed sum.
As at 30 June 2012, HSBC's Pakistan operations comprised a network of 10 branches and total asset base of PKR 59 billion (US$630 million).
JS Bank is a majority owned subsidiary of Jahangir Siddiqui & Co and was formed after the merger and amalgamation of Jahangir Siddiqui Investment Bank (formerly Citicorp Investment Bank) and American Express Bank - Pakistan operations.
JS Bank commenced operations in Pakistan as a scheduled commercial bank on December 31, 2006 and currently operates 153 branches in 82 cities with a total asset base of PKR 64.5 billion as of 30 June 2012.
"This acquisition will act as a catalyst in achieving JS Bank’s growth strategy to position the bank as one of the key players in the financial sector with the introduction of premium banking and credit cards suite," said JS Bank on its website.
HSBC confirmed the sale.
The sale, which is expected to complete in the final quarter, is the latest in a string of asset offloads. It comes as part of the British lender's strategy to cut back on regions where it is making less money, to slash group costs.
In July the bank was said to be offloading stakes in four Indian lenders, Axis Bank, YES Bank, Federal Bank and Karnataka Bank.
Last year HSBC outlined plans to cull 3,000 jobs in Hong Kong as part of a cost-cutting strategy, and exited retail and private banking divisions in South Korea, Japan and Thailand. But at an investor meeting in May this year, chief executive Stuart Gulliver said that the bank's commitment to wealth management in Asia was stronger than ever.
“Wealth management is core to Hong Kong, it's core to the UK, and it’s core to 18 other markets," said Gulliver at the conference.
"There are 18 countries where we have a (wealth management) presence. What we’ve done by exiting places like Korea and Japan is to get out of mass retail banking in countries where we don’t have the size and scale to compete against the domestic banks who are also doing mass retail banking."
"But wealth is a tremendous opportunity for us in many parts of Asia, like Australia, Singapore and Malaysia. We are in the part of the world which will see disproportionate GDP growth, and so huge wealth creation over the next few years.”