HSBC has finalised agreements with two firms that will see the bank sell its general insurance businesses for a combined fee of £914 million.
The leading European financier has struck up a deal with French insurance company AXA Group and Australian organisation QBE Insurance Group as part of its plans to restructure its operations in the aftermath of the global economic downturn.
In general, banks are now more open to the idea of selling capital-intensive divisions of their organisations in order to make sure they are in a position to comply with the stricter capital reserve requirements being imposed by regulatory bodies.
These deals will involve the earning of profit-related payments and commissions for HSBC - which recently revealed a pre-tax profit of $21.9 billion for 2011 - as well as the initial cash payments from the purchasers.
Ron Kozlowski, director of the Asia Pacific general insurance consulting business at Towers Watson, told Reuters other firms will follow HSBC's lead in re-balancing its asset portfolio.
By Claire Archer