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HONG KONG/LONDON, May 22 (Reuters) - HSBC Holdings Plc is exploring the sale of its Brazilian unitafter interest in the business stepped up and Santander'sBrazilian arm said it would consider a purchase.
HSBC said on Friday it was "exploring various strategicoptions" including a sale of its Brazilian operations. Nodecision on any transaction had yet been made, it said in ashort statement.
Banco Santander Brasil Chief Executive JesusZabalza said this week he was studying purchasing terms for thebusiness, though he wanted to see more details before making adecision.
HSBC Chief Executive Stuart Gulliver said in February thebank's four problem businesses -- Brazil, Mexico, Turkey and theUnited States -- needed to improve or be sold.
The bank has started a sales process in Brazil and Turkey,but the U.S. and Mexico businesses were likely to be kept,sources have said.
HSBC is expected to select a preferred bidder for itsBrazilian arm as early as next month, Reuters reported on May13.
Bids for the unit may not surpass book value, which isestimated at around $3.3 billion, sources said.
In addition to Santander Brasil there had also been interestfrom Banco Bradesco, BTG Pactual,Canada's Bank of Nova Scotia and China's ICBC, sources said.
HSBC's Brazilian and Turkish arms are big businesses but notamong the top five banks in either country. HSBC lost $247million in Brazil and $64 million in Turkey last year, as lossesin retail banking offset profits in investment banking in bothcountries.
Gulliver is expected to give more details on potentialdisposals at a strategy day on June 9, as part of his attempt tocut costs and simplify the bank to improve profitability andavoid compliance problems. (Reporting By Lawrence White in Hong Kong and Steve Slater inLondon; Editing by Gopakumar Warrier; editing by Susan Thomas)