The UK lender intends to execute the withdrawal process in a phased manner, which will take several years to complete, as part of its strategy to exit from less profitable businesses worldwide and to expand in certain Asian markets
HSBC to close its operations in New Zealand. (Credit: Joshua Lawrence on Unsplash)
HSBC has unveiled its plans to wind down its wealth and personal banking business in New Zealand, as part of its strategy to exit from less profitable businesses worldwide.
The UK lender said that its decision is driven by changing operating requirements in the market and the scalability of the business and plans to expand in certain Asian markets.
The withdrawal process, which follows a strategic review, is planned to be executed in a phased manner and will take several years to complete, reported Reuters.
In November last year, HSBC announced the possible sale of its New Zealand business, along with a shutdown of 114 branches in the UK.
Last month, the bank said that it is reviewing a possible exit from around a dozen countries, or one among five markets it operates in, to focus on its Asian expansion.
The review follows pressure from Chinese shareholder Ping An Insurance on HSBC to prioritise growth in Asia, where the lender generates 78% of its total profit, reported Reuters.
HSBC chief financial officer Georges Elhedery then told Reuters: “Some of these will have slower progress than others, and none of them is material enough on its own to change the profile of the overall business, but as we progress through and execute on these assessments, we do expect them to contribute towards that shift to Asia.”
HSBC said that it will continue to operate and expand its wholesale banking business in New Zealand, which primarily serves international clients.
The business includes commercial banking and financial institutions and government, along with markets and securities services businesses.
Its focus on Asia markets has already triggered planned sales of its operation in France, Greece, Russia and Canada, said the publication.
Furthermore, the British bank said that it is helping its customers in New Zealand, to switch to other personal and wealth service providers and will remain as usual for its customers and staff.