Citigroup and HSBC are among those banks believed to be considering the sale of some of their businesses as a result of the credit crunch, the Wall Street Journal reports.
The sales could come in the form of small assets such as branches or could involve entire units. Insiders told the newspaper that Citigroup could be on the verge of shutting down or even selling a number of its medium-sized units, with up to $12 billion worth of non-essential assets subject to forthcoming review.
Sources say that Citigroup could be thinking of surrendering its 80% share in the Student Loan Corp, its US auto-lending business, its 24% stake in credit card firm Redecard or the bank’s Japanese consumer finance business.
It is common knowledge that Citigroup’s new CEO Vikram Pandit plans mass redundancies in order to cut costs.
Sources also told the newspaper that HSBC is set to dump its $13 billion auto-finance business, which the bank refuses to confirm.
“You wouldn’t expect us to comment on such speculation. We are one of the most strongly capitalised and liquid banks in the world. If we were to do this, it would be a strategic decision and we’ve said we’re not shy of taking tough decisions,” says an HSBC spokesperson, speaking to Thomson Financial.