United Overseas Bank (UOB) has announced that it will purchase the banknotes business of HSBC for approximately US$15 million.
UOB added that it will acquire the physical assets of HSBC’s banknotes business in Singapore, Japan, Taiwan, Beijing and Hong Kong.
HSBC, on the other hand, will license UOB the technology being used with the banknotes operation, as well as work with UOB to help the signing of new contracts between UOB and the staff and clients of HSBC’s banknotes business.
The new business involves the purchasing and selling of physical banknotes in Japan, Singapore, Taiwan, Beijing and Hong Kong, and this will grow UOB’s fee-based business, said Ng Kwan Meng, managing director and head of global markets at UOB.
“There are demands for physical currencies for travellers and trade payments in various countries. Besides the currencies mentioned, the US dollar is another key currency in demand,” he said.
UOB noted that the transaction is expected to be completed in the fourth quarter of this year. “The transaction is expected to significantly grow UOB’s banknotes business in the region,” it said.