Berita 24 E nglish - HSBC announced it is exiting mass-market retail banking in the United States by selling some businesses and winding do...
Berita 24 English - HSBC announced it is exiting mass-market retail banking in the United States by selling some businesses and winding down others, a long-awaited move as the lender continues its focus on Asia, its largest market.
Europe's largest bank has been attempting for years to reduce its footprint in certain European and North American markets where it has faced stiff competition from larger domestic players.
The bank announced late Wednesday that it would exit retail banking for most individual and small business customers. Still, it would maintain a small physical presence in the United States to serve its international affluent and ultra-affluent clients.
"They are excellent businesses, but we lacked the scale to compete," HSBC group CEO Noel Quinn said in a statement.
HSBC unveiled a revised strategy in February focused primarily on wealth management in Asia while also stating that it was "exploring organic and inorganic options" for its retail banking franchise in the United States.
Quinn has been stepping back from sub-scale markets and businesses as part of its strategy to reduce costs across the banking group and redouble efforts to boost growth in its primary markets of Asia and the United Kingdom.
According to Reuters, HSBC has entered final negotiations to sell its French retail banking business to private equity firm Cerberus.
Citizens Bank, a subsidiary of Citizens Financial Group, has agreed to acquire HSBC's east coast personal and small business banking business, including 80 branches. In contrast, Cathay Bank, a subsidiary of Cathay General Bancorp, has agreed to acquire HSBC's west coast personal and small business banking business, including 10 branches, according to HSBC and separate statements from the two US-based banks.
These documents did not specify how much the two banks paid for the businesses, though HSBC stated that it anticipated pre-tax costs of $100 million due to the transactions.
The bank's Hong Kong-listed shares initially fell more than 1% before recovering to trade in line with the local benchmark.
"The markets will perceive this as neutral, as we have anticipated it for a long period of time," said Dicky Wong, executive director at brokerage Kingston Securities.
