HSBC sells UK pension business to Swiss Re unit

The UK bank HSBC said on Wednesday that its subsidiary HSBC Life had sold its pension business in the UK to a unit of the insurer Swiss Re.

The agreement would see, HSBC Life sell its corporate and individual pension policies business in the UK as also associated annuities business to Admin Re, a unit of Swiss Re.

The transaction terms were not disclosed on Wednesday.

The New York Times reported John R Dacey, Swiss Re's Admin Re chairman as saying such transactions allowed Admin Re to maintain and expand the scale of its business and provide attractive shareholder returns.

The sale is seen as HSBC's latest bid to cut costs and improve its profitability through focus on higher margin businesses.

As at end 2013, the banks business in the UK had £4.2 billion, in assets under management. Around £4 billion of those assets were under the management of HSBC Global Asset Management, which would manage those underlying assets after the transaction.

The deal would be subject to regulatory approval, with completion expected in the second half of 2015.

''The transaction is an attractive opportunity for Admin Re and confirms our commitment to execute on the strategy to grow the Admin Re business in the UK,'' Dacey, said in a statement. ''Transactions such as this allow Admin Re to maintain and increase the scale of its business and provide attractive shareholder returns.''

The sale includes over 400,000 corporate and individual pensions policies, as also an associated annuities book, ''by way of an insurance business transfer scheme,'' HSBC said in the statement. HSBC Global Asset Management would continue as manager of the underlying assets offering pension products underwritten by other providers, the bank said, Bloomberg reports.

HSBC, Europe's biggest bank, had sold or shuttered over 60 businesses since 2011 as chief executive officer Stuart Gulliver sought to control costs and up profitability.

The deal comes following UK chancellor of the exchequer George Osborne scrapping his March budget that required retirees to buy an annuity with their pension savings.