HSBC to divest Asian wholesale banknotes business

UOB to acquire US$15mln operations that has 120 full-time employees located in major Northeast Asia cities.

HSBC has entered into an asset purchase agreement to sell the physical assets of its wholesale banknotes business in Asia to United Overseas Bank Limited (UOB) for a total consideration of US$15 million in cash. As part of the agreement, HSBC will also licence to UOB the technology system used in connection with its Asian wholesale banknotes business. HSBC will work with UOB to facilitate the signing of new contracts between UOB and customers and staff of HSBC’s Asian banknotes business. The transaction is expected to complete in the fourth quarter of 2010, according to an HSBC report.

HSBC’s wholesale banknotes business in Asia operates through HSBC Bank USA, N.A., The Hongkong and Shanghai Banking Corporation Limited and HSBC Bank (Taiwan) Limited and has approximately 120 full-time employees located in Hong Kong, Singapore, Tokyo, Taipei and Beijing servicing wholesale customers across the region.

The global wholesale banknotes business, which has been managed out of the United States by HSBC Bank USA through operations in key locations around the world, arranges the physical distribution of banknotes primarily to central banks and large commercial banks. In June 2010, HSBC Bank USA determined that this largely stand-alone business was not core to its strategy and made the decision to exit the business. The parts of the business that are not the subject of this sale are being closed.

HSBC was advised on the transaction by HSBC Global Banking and Markets.