HSBC is selling its US retail banking unit after agreeing deals with Citizens Bank and Cathay Bank.
Specifically, HSBC is exiting 90 of its current 148 branches. HSBC will retain a small network of branches, to be repurposed into 20-25 international wealth centres.
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The remaining 35-40 branches will be wound down.
HSBC exits US retail banking: other plans include:
- exiting all Personal, Advance and certain Premier banking customers (those with balances below $75k);
- exiting all retail business banking customers (small businesses with turnover of $5m and under).
- Citizens Bank will purchase HSBC’s East Coast domestic mass market and retail business banking businesses as well as the online bank portfolio. This includes 80 branches and approximately 800,000 customer relationships with about $9.2bn in deposits and $2.2bn of outstanding loans as at 31 March 2021.
- Cathay Bank will purchase HSBC’s West Coast domestic mass market and retail business banking businesses. This includes 10 branches and approximately 50,000 customer relationships with $1.0bn in deposits and $ 0.8bn of outstanding loans as at 31 March 2021.
Noel Quinn, CEO HSBC, says: “We are pleased to announce the sale of the US mass market retail banking unit. They are good businesses, but we lacked the scale to compete. Our continued presence in the US is key to our international network and an important contributor to our growth plans. This next chapter of HSBC’s presence in the US will see the team focus on our competitive strengths. This connects our global wholesale and wealth management clients to other markets around the world.”
HSBC US: 80 branches axed in 2020
HSBC has been shrinking its US retail banking unit in recent years and last year shuttered 80 branches.
The HSBC branch network in the US peaked at 485 branches in 2010.
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By GlobalDataThe bank says that it will not generate a significant gain or loss from the Citizens and Cathay Bank deals. It will however incur costs of $100m as a result of the transactions.
Michael Roberts, CEO, US, Americas, adds: “This is an important step towards becoming a more focused, simpler sustainably profitable organisation. A strong, internationally connected US business is an important part of HSBC’s value proposition. We are excited to be focusing the US business in areas of competitive strength. At the same time, I am very pleased that we were able to execute this strategic repositioning at pace. It was also important for us to find buyers who would be a good fit for our customers and employees.”
