The Strategist

HSBC to leave US retail market


05/28/2021 - 03:32



HSBC, the second-largest bank in Europe and the sixth-largest in the world by assets ($2.9 trillion), announced yesterday that it is leaving "mainstream" retail banking in the US.



Amitauti
Amitauti
HSBC USA has total assets of $204bn and serves 2.4m customers in the US, including retail, corporate and affluent. The bank said it will sell 90 of its 148 total retail branches in the US, close 35-40 and leave only about 20 branches to be refocused on affluent customers.

HSBC's 80 US retail branches on the US East Coast, serving around 800,000 customers, with total deposits of $9bn and loans of $2.2bn, will be bought by US Citizen Bank. Ten branches on the West Coast, serving about 50 thousand people with total deposits of $1 billion and loans of $800 million, will be bought by the Chinese-American Cathay Bank.

This decision by HSBC was not unexpected. At the beginning of last year, the bank announced plans to cut costs on a large scale, including the closure of part of its branch network and the dismissal of 35,000 employees around the world. In the US alone, the bank was going to close at least a third of its branches and refocus on serving wealthy clients. HSBC was forced to take such measures because of mounting losses - in 2019 alone, the bank's shareholder profit fell 53%, to $6bn, due to $7.3bn writedowns in its global banking and commercial banking divisions. Pre-tax profits fell 33% to $13bn.

source: cnbc.com




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