HSBC Q2 net profit falls 3.8%, to sell Brazil business for US$5.2b

Two customers stand at a HSBC bank cash dispenser, following the announcement of the bank to close HSBC Brazil.
Two customers stand at a HSBC bank cash dispenser, following the announcement of the bank to close HSBC Brazil.PHOTO: AFP

HONG KONG (AFP) - HSBC announced Monday that net profit fell 3.8 per cent in the three months to June, as the company agreed to sell its Brazilian business for US$5.2 billion (S$7.15 billion) to Brazil's Banco Bradesco.

Europe's biggest bank announced in June that it would cut its global workforce by up to 50,000 as it exits Brazil and Turkey.

The moves come as HSBC tries to boost profits and move past recent scandals, including the rigging of foreign exchange markets.

In the first half of 2015 net profit dropped 1.3 per cent, although the company emphasised a rise in pre-tax profits, which went up 10 per cent over the six months.

Quarterly profit fell to US$4.36 billion from US$4.54 billion in the same period last year, while the half yearly figure fell from US$9.746 billion to US$9.618 billion.

"The environment for banking remains challenging," said group chairman Douglas Flint, but added that the bank still held a "privileged position" in global trade and investment.

"We have the financial strength and the right people at all levels of the firm to make the most of the opportunities open to us," Flint added.

HSBC confirmed the Brazil sale in a separate statement to the Hong Kong bourse.

"The sale of HSBC Brazil represents a significant step in HSBC's stated goal to optimise its global network and reduce complexity," the statement said.

CEO Stuart Gulliver added: "I am pleased to be able to announce today a transaction which achieves both a solid financial outcome and swift delivery of one of our stated actions."

Shares in the banking group traded flat on the Hong Kong exchange by the midday break at HK$69.7 (S$12.36).