HSBC sold the U.S. retail banking network, effectively ending the struggling North American business after 40 years of trying to run a full-service bank in the country.
Most lenders in Europe first considered a throwback to the constant non -essential American divide. end of last year as part of the bank’s efforts to save costs of nearly $ 4.5bn and cut 35,000 jobs.
HSBC said on Thursday it had sold 80 of Citizens Bank’s 148 east coast branches, which also raised $ 9.2bn in deposits and $ 2.2bn in outstanding loans. Ten west coast branches have been bought by Cathay Bank, which has secured more than $ 1bn in deposits and $ 800m in loans. The remaining branches will be crushed.
HSBC said it would not generate a “significant profit or loss” from the deal between Citizens Bank and Cathay Bank, other than incurring $ 100m in transaction costs.
The amount HSBC will invest in wealth management in mainland China and Hong Kong
The lender, which makes the most of Hong Kong’s revenues, said it would remain in “a small network of physical locations” in the U.S. after the move. These will become “international wealth centers” for private banking and wealth management clients, most of which are in Asia.
The sale is the latest phase of an achievable program to also utilize $ 100bn weights of risky assets from undeveloped businesses in Europe and the U.S. to Asia. , especially resource management and asset repair. In February, HSBC SAYS further expand the resource management business that will pay Hong Kong and mainland China, where it will invest $ 3.5bn and hire more than 5,000 consultants
U.S. network sales are more in line with China’s bank assets. HSBC has been used as a political piñata in recent years as tensions rise between Beijing and Washington.
Noel Quinn, chief executive of HSBC, said the bank would exit the U.S. mass market because it “lacks the scales to compete”.
“Our continued U.S. presence is key to our international network and a significant contributor to our growth plans,” he said.
Greg Hingston, head of wealth and personal banking for Asia Pacific, said: “The US has a huge role to play in HSBC’s growth strategy in Asia. Our revised U.S. strategy will allow us to better serve the needs of our international wealth clients, continuing to consider the U.S. for international education, wealth, investment diversity, career and family mobility and business expansion, and so on. “
HSBC closed 80 of its branches in the U.S. last year, leaving it small in the network of rivals such as JPMorgan and Bank of America. Insiders say the division’s lack of size makes it more difficult to turn it around, especially during a coronavirus crisis and a time when interest rates are much lower forced to look for higher. margin fee.