Standard Chartered, the British bank which generates most of its profit in Asia has agreed to sell its Hong Kong and Shenzhen’s consumer finance businesses to a consortium which is lead by the China Travel Financial Holdings Company. The bank has agreed to sell the units for $600 million-$700 million.
Standard Chartered has been pruning noncore assets as the British Bank strives to increase its profit. Last year, Standard Chartered bank announced its plan to exit or sell few of its smaller businesses.
A group of investors which include York Capital Management Global Advisors, China Travel Financial and Pepper Australia Pty Limited will buy Shenzhen PrimeCredit Limited and PrimeCredit Limited.
According to sources, China Travel which is a state-owned enterprise operating in the travel business and is seeking to expand into the financial services sector, hoping to cross-sell products to its existing clients.
Pepper Australia Pty Limited is a specialty mortgage lender, an asset manager and third-party loan servicer with businesses in Australia and in the United Kingdom.
The terms of the deal which is subject to regulatory approval has not been revealed.
Standard Chartered said that it was seeking to sell the PrimeCredit consumer finance units not considered part of its core business in Asia for up to $700 million.
The consortium has agreed to sell the Bank of East Asia, following the sale. The Bank of East Asia is a portfolio of residential mortgages which is held by PrimeCredit Limited which is worth about $761 million or 5.9 billion Hong Kong dollars.
The Bank of East Asia chief executive and chairman, David K.P. Li said that they believe that this acquisition will help the bank effectively increase its assets in Hong Kong. According to Li, the acquisition will also provide them with an opportunity to build relationships with these newly acquired customers.