HSBC’s Mauritius Investments Have Been Selling Stakes in Several Indian Banks

HSBC India Services PMI jumps to 3-month high of 54.7 in May

In the last few weeks, HSBC has been selling off its stakes in several Indian banks through its Mauritius branch of investments. The Mauritius route is notorious for routing black money to India as well as offering a safe haven for tax evaders and money launderers.HSBC’s staff in India have come under the scanner for deficiencies in their role as “offshore reviewers” of the global banking giant’s compliance to safety mechanism against money laundering and terrorist financing. 

HSBC offloads entire stake in Federal Bank for Rs.341 cr

Global banking giant HSBC, on Tuesday, sold its entire 5 per cent stake in Kerala-based private sector lender Federal Bank for a little over Rs.341 crore through open market transactions.

According to bulk data available with the stock exchanges, HSBC held 85.16 lakh shares, or 4.98 per cent stake in Federal Bank through HSBC IRIS Investments Mauritius Ltd.

HSBC Sells Stakes in Two Indian Banks

A unit of HSBC Holdings PLC sold stakes in two Indian banks for around $425 million, HSBC said.

The U.K.-based bank sold a 4.73% stake in India’s third-largest nongovernment bank, Axis Bank Ltd., for around $329 million, and a 4.74% stake in the smaller Yes Bank Ltd. for around $96 million. HSBC described these sales as the disposal of “non-core investments,” in its statement. HSBC currently runs a bank and offers other financial services in India.

The Axis and Yes Bank stakes were owned by HSBC Iris Investments (Mauritius) Ltd., a wholly owned subsidiary of HSBC Holdings. HSBC’s sale is the latest of several deals this year in which foreign investors have cashed in on their investments made in Indian lenders over the last decade.

HSBC may exit Karnataka Bank with sale of 4.46% stake

Global banking major HSBC is looking to offload its entire 4.46% stake in private sector lender Karnataka Bank, after having exited from three other Indian lenders — Axis Bank, Yes Bank and Federal Bank.

HSBC had invested in all these banks as part of its investment portfolio and began selling these shares about three months ago.

This was part of a global exercise to shore up its capital by liquidating non-strategic holdings.

HSBC has garnered an estimated Rs 2,800 crore through sale of its shares in Yes Bank, Axis Bank and Federal Bank, while its current holding of 83.99 lakh shares (4.46% stake) in Karnataka Bank is worth about Rs 70 crore as per current market valuations.

Investment banking sources said the UK-based banking giant would soon look at selling its Karnataka Bank shares, which is held through one of its investment arms, HSBC Bank (Mauritius).