A sign of HSBC private bank (Suisse) in the center of Geneva
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HSBC has continued its retreat from some of its extensive banking empire by selling a portfolio of Swiss private banking assets to Liechtenstein’s LGT Group.

The deal, designed to make HSBC’s Swiss private bank more profitable and less risky, will cut in half the number of countries in which the business has customers from more than 150 to about 70.

Europe’s biggest bank by market capitalisation has been retreating from several non-core markets around the world to simplify its structure and reduce its riskiness since Stuart Gulliver took over as chief executive in 2011.

The bank has sold more than 60 businesses around the world since Mr Gulliver became CEO, including its Japanese private bank, Russian retail bank and several Latin American operations.

If anything, analysts say HSBC has become more risk-averse since it paid almost $2bn in fines and signed a deferred prosecution agreement (DPA) with US authorities in December 2012 after admitting that it processed drug trafficking proceeds through Mexico and transmitted funds from sanctioned countries including Iran.

“There are certain clients who for the banks the risk does not match the reward,” said James Chappell, banking analyst at Berenberg. “Since the change in management at HSBC in 2011 there has been a real focus on risk in the business and that was heightened with its DPA”.

The deal with LGT will transfer $12.5bn of assets from HSBC’s Swiss private bank for clients in countries across Europe, Africa and Latin America, equal to 15 per cent of its total assets under management.

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