Of Special Interest


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16th August 2011

HSBC T&B bidding for parts of WestLB

HSBC Trinkaus & Burkhardt announced that it was in constructive talks to acquire parts of WestLB. The European Commission ordered that WestLB must be sold after too many rounds of state aid. The chief shareholder is the state of North Rhine Westphalia. The indication from the HSBC T&B announcement is that a single bidder even for the 'good bank' parts of WestLB has not been found and that a break up is now under consideration.

It is expected that HSBC T&B will be primarily interested in the corporate finance arm. This accounts for around 30% of the core revenues of the good bank. The fit would appear so obvious it is surprising that matters have not developed before. Both banks are based in Düsseldorf and HSBC T&B has suffered from a lack of scale with relatively little expansion over the years. HSBC is a notoriously cautious acquirer and may have decided to wait to be sure of the correct separation of assets within WestLB and for the price to be right. HSBC T&B is 80% owned by HSBC Holdings.