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Wednesday, Jun 23, 2021

HSBC to pull out of mass-market banking in the US

HSBC to pull out of mass-market banking in the US

The lender is undergoing a shift in strategy, selling off unprofitable parts of its business in France and the US.
HSBC says it will be ending retail banking in the US for most individual customers and small businesses, as part of a wider strategy to refocus on Asia.

The London-based lender has had trouble competing with America's largest banks, and said earlier this year that it would be redirecting jobs and capital to Asia, where it makes the vast majority of its profit.

As part of its downsizing HSBC, one of the world's biggest banks, said it would sell 90 of its 148 branches in the US, and would wind down a further 35 to 40.

It will keep around two dozen locations, in key cities across the US, from which to service its wealthy clients. The bank promised to keep open customer accounts with balances of more than $75,000, and business accounts with a turnover of $5m or more.

“We are pleased to announce the sale of the domestic mass market of our US retail banking business,” said group chief executive Noel Quinn. "They are good businesses, but we lacked the scale to compete.”

HSBC will sell its branches to two regional banks, Citizens Bank and Cathay Bank.

In February, the lender said it would begin to exit the US market while pumping some $6bn of investment into Asia over the next five years. It also said that it would quit the loss-making French market after two decades of doing business there.

But the bank is in a difficult position, headquartered in London but with large swathes of its business based in Hong Kong and China.

HSBC recently pointed to risks from frayed relations between China and the West and "dampened" business sentiment in some parts of the Hong Kong market - where HSBC, which has a base in the territory, has been criticised over its stance in relation to a political clampdown by Beijing.
HSBC's profits fell by 34% last year.
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