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HSBC to divest trust and investment management operations in Bermuda to Butterfield

BBR Staff Writer Published 28 October 2015

HSBC Bank Bermuda, a unit of HSBC Holdings, has agreed to divest its Bermuda Trust Company and investment management operations in Bermuda to the Bank of N.T. Butterfield & Son for an undisclosed amount.


The move is in line with the bank's plans to focus on a smaller number of future growth markets, by offloading unprofitable businesses.

This follows the sale of bank's Brazilian operations to Banco Bradesco in August this year.

Subject to regulatory approval, the sale is expected to be completed in the first half of 2016.

As of 31 December 2014, the trust and investment business had $24bn worth of assets under administration and $1.5bn of assets under management, while existing private banking clients had $1.2bn of assets under management.

Under the agreed terms, the bank will refer its current private banking clients to Butterfield.

Based in Bermuda, Butterfield is a community bank that provides various specialized financial services.

It provides current and chequing accounts, savings accounts, and fixed term deposits; personal loans, mortgages, home equity loans, and overdraft protection services; debit and credit cards; and Internet and automated teller machines banking services.

Additionally, HSBC is transferring derivative trades from London to Hong Kong due to the regulatory changes made in the UK and EU.

The high costs associated with the stringent regulations made after the 2008 financial crisis are burdening banks' derivatives trading in the US and Europe.

Image: HSBC's headquarters in London. Photo: courtesy of Danesman1 / Wikipedia.