Of the total 148 branches, HSBC will exit from 90 branches, retaining few locations, and close the remaining 35 to 40 branches
HSBC headquarters at Canary Wharf, London. (Credit: Gordon Joly/Wikipedia.)
HSBC has unveiled its plans to close its US domestic mass market retail banking business to focus on the banking and wealth management needs of international high net-worth clients.
Earlier, the bank announced that it is exploring strategic options for its US retail franchise to improve the profitability of its US retail business.
Along with retail business banking business, HSBC Bank USA (HBUS) will also exit from all the personal, advance and certain premier banking operations.
From the existing network of 148 branches, HBUS intends to exit from 90 branches, retaining few physical locations in existing markets, and close the remaining 35 to 40 branches.
The transactions are expected to be completed by the first quarter of 2022, subject to regulatory approvals.
HSBC Group chief executive Noel Quinn said: “We are pleased to announce the sale of the domestic mass market of our US retail banking business. 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, connecting our global wholesale and wealth management clients to other markets around the world.”
Citizens Bank has agreed to acquire the HBUS’ East Coast domestic mass market and retail business banking businesses, along with the online bank portfolio.
The businesses comprise 80 branches and nearly 800,000 customer relationships with around $9.2bn in deposits and $2.2bn of outstanding loans as of 31 March 2021.
Cathay Bank has agreed to buy the West Coast domestic mass market and retail business banking businesses, including 10 branches with $1bn in deposits and $0.8bn of outstanding loans as of 31 March 2021.
HBUS said that it will retain a small network of locations in existing markets, and will repurpose them into 20 to 25 international wealth centres.
The global wealth centres are planned to serve the bank’s core international customer base of around 300k affluent and high net worth customers.
HSBC US and Americas CEO Michael Roberts said: “Today’s announcement is an important step towards becoming a more focused, simpler and sustainably profitable organisation.
“A strong, internationally connected US business is an important part of HSBC’s value proposition, and 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.”