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HSBC has sold its U.S. retail banking network, which is ending its North American business after a 40-year attempt to run a full-service bank in the country.
The largest European lender considered the provision of the US division to make constant losses at the end of last year as part of the bank’s efforts to make deep savings of about $ 4.5 billion and reduce 35,000 jobs.
HSBC said on Thursday it sold 80 of its 148 branches on the east coast to Citizens Bank, which has secured $ 9.2 billion in deposits and $ 2.2 billion in loans. Cathay Bank has bought ten branches on the west coast, taken out $ 1 billion in deposits and $ 800 million in loans. The remaining branches will be crushed.
HSBC has said it will not generate “significant gains or losses” from its agreements with Citizens Bank and Cathay Bank, which would cost the company $ 100 million in the transaction.
$ 3.5 million
The amount will be invested by HSBC in wealth management in mainland China and Hong Kong
The lender, the largest share of the profits in Hong Kong, said it would maintain “a small network of physical locations” in the U.S. after the eviction. These would become private banking and wealth management clients for “international wealth centers,” most of which were in Asia.
Sales of $ 100,000 billion in risk-weighted assets are a final step in a long-term program to redirect businesses from Asia and the United States to Asia, especially in wealth and asset management. In February, HSBC he said it would further expand its wealth management business in Hong Kong and mainland China, where it will invest $ 3.5 billion and hire more than 5,000 consultants.
Sales of the U.S. network link the bank’s wealth more closely with China. HSBC has been used as a political piñata in recent years as tensions between Beijing and Washington have risen.
HSBC CEO Noel Quinn said the bank is leaving the massive US market because of “a lack of scale to compete”.
“Our continued presence in the US is key to our international network and an important contributor to our growth plan,” he said.
Greg Hingston, head of Asia Pacific Wealth and Personal Banking, said: “The US plays a major role in HSBC Asia’s growth strategy. because they continue to consider investment diversification, career and family mobility and business expansion ”.
HSBC closed 80 U.S. branches last year, leaving part of a network of rivals like JPMorgan and Bank of America. Interiors believe that the lack of a division scale made rotation difficult, especially during the coronavirus crisis and a period of very low interest rates, which forced them to seek higher margin quotas.
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