HSBC To Exit U.S. Retail Banking
May 26 2021 - 9:16PM
Dow Jones News
By Kimberly Chin
HSBC Holdings PLC will exit from its U.S. retail and
small-business banking operations as the bank shifts its focus to
wealth management and international banking, especially in
Asia.
The banking giant said late Thursday that it will exit 90 of its
148 branches in the U.S. through a series of transactions. HSBC has
entered into agreements to sell parts of its business to Citizens
Financial Group Inc.'s Citizens Bank and Cathay General Bancorp's
Cathay Bank. It also plans to wind down around 35 to 40
branches.
HSBC will retain around two dozen locations in some of its
existing markets and convert the sites into so-called international
wealth centers, it said. That would help the bank focus on the
"banking and wealth management needs of globally-connected affluent
and high net worth clients," it added.
As such, the bank will no longer service banking customers with
balances below $75,000. It will also cut ties with all of its
retail business customers, which includes small businesses, it
said.
"This next chapter of HSBC's presence in the U.S. will see the
team focus on our competitive strengths, connecting our global
wholesale and wealth management clients to other markets around the
world," HSBC's Group Chief Executive Noel Quinn said in prepared
remarks. He said the bank's U.S. mass retail operations "are good
businesses, but we lacked the scale to compete."
The London-based lender, which makes most of its profit in Hong
Kong and mainland China, is more than a year into a major overhaul
to refocus its operations in Asia. In February, the bank said that
it was considering selling its unprofitable U.S. retail operations
and pouring about $6 billion of investment into Asia in the next
five years.
HSBC is also in talks to sell its unprofitable French retail
bank.
The bank said it has agreed to sell its East Coast mass market
and retail banking businesses, which include 80 branches and around
800,000 customer accounts, as well as its online bank portfolio to
Citizen Bank. Those accounts had about $9.2 billion in deposits and
$2.2 billion in outstanding loans as of the end of March.
HSBC's West Coast retail bank operations, which include 10
branches and about 50,000 customer accounts, would be sold to
Cathay Bank.
The deals, which are subject to regulatory approval, are
expected to close in the first quarter of 2022. HSBC said it
expects to incur about $100 million in pretax costs for the
transactions.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
May 26, 2021 21:14 ET (01:14 GMT)
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