The Strategist

HSBC may refuse to provide retail services in the US


11/30/2020 - 04:35



HSBC managers are considering discontinuing retail services in the US, the Financial Times reports citing sources at the bank. This decision may be made due to the bank's weak financial performance in North America.



Martin Richard Phelan
Martin Richard Phelan
The plan for phasing out retail services in the US may be presented to the bank's Management Board in the coming weeks. The management of the bank believes that instead of continuing to suffer losses in the US market, it is better to redirect the saved resources to a more successful Asian market.

HSBC's Retail Banking division has suffered losses in recent years. In the first nine months of this year, for example, its net loss reached $518 million. Last year's loss was $279 million and it was $182 million in 2018. 

Thus, the situation is only getting worse every year, and the COVID-19 pandemic has triggered a sharp drop in the division's revenue this year. As a result, the bank has already closed around 80 branches in the USA, leaving a total of around 150 offices nationwide. In addition, as early as spring, the bank announced reduction of 35,000 employees worldwide due to unsatisfactory financial results.

The bank has been present in the US market for about 40 years and is not yet planning to leave, despite the possible curtailment of retail services. According to one source, the US market is still very important for HSBC's Investment and Asset Management divisions.

source: ft.com