HSBC dumps US retail banking, eyes Asia growthEuropost
UK bank conglomerate HSBC announced it would exit the US retail market, Reuters reported. The bank said that retail operations contributed for piling up new losses. Instead, HSBC confirmed it would focus on expanding operations on the fast growing Asian market. The biggest European bank has for years been trying to shrink its presence in European and North American markets where it has struggled against competition from larger domestic players.
The bank said in a statement it would exit retail banking for most individual and small business customers but retain a small physical presence in the United States to serve its international affluent and very wealthy clients. "They are good businesses, but we lacked the scale to compete," Noel Quinn, HSBC group CEO, said in the statement. HSBC unveiled in February a revised strategy focused mainly on wealth management in Asia, and at the same time said it was "exploring organic and inorganic options" for its US retail banking franchise. As part of Quinn's gameplan that also involved slashing costs across the banking group, the London-headquartered bank has been looking to step back from sub-scale markets and businesses.
Citizens Bank has agreed to buy HSBC's east coast personal and small business banking business including 80 branches, and Cathay Bank has agreed to buy its west coast business including 10 branches, according to HSBC and separate statements from the two US -headquartered banks. These did not say what the two banks paid for the businesses, though HSBC said it expected to incur pre-tax costs of $100 million connected with the transactions. HSBC's US wealth and personal banking business made a loss of $547 million in 2020, according to the bank's annual results, versus a $5 billion profit in Asia, primarily from Hong Kong, its most profitable market.