HSBC has sold its U.S. retail banking network, effectively ending its operations in North America after a 40-year attempt to run a full-service bank in the country.
Europe’s largest provider has previously considered a disposition of its American division constantly losing at the end of last year as part of the bank’s efforts to make cost savings of about $ 4.5 billion and cut 35,000 jobs.
HSBC said Thursday it had sold 80 of its 148 east coast subsidiaries to Citizens Bank, which also acquired $ 9.2 billion in deposits and $ 2.2 billion in outstanding loans. Ten subsidiaries on the west coast have been acquired by Cathay Bank, which has taken more than $ 1 billion in deposits and $ 800 million in loans. The remaining branches will be torn off.
HSBC said it would not generate a “significant gain or loss” from the deal with Citizens Bank and Cathay Bank, other than incurring $ 100m in costs for the transaction.
$ 3.5 billion
HSBC will invest in wealth management in mainland China and Hong Kong
The lender, which has made most of its profits in Hong Kong, said it would maintain “a small network of physical locations” in the United States after the disposal. These would become “international wealth centers” for their private banking and wealth management clients, most of whom were in Asia.
Sales are the latest step in a far-reaching program to redistribute $ 100 billion in risk-weighted assets from underperforming companies in Europe and the United States to Asia, particularly in wealth and business management. . In February, HSBC he said it will further expand its rights-generating wealth management business in Hong Kong and mainland China, where it will invest $ 3.5 billion and hire more than 5,000 advisors.
The sale of the US network aligns the bank’s fortunes closer to China. HSBC has been used as a political hotbed in recent years as tensions have risen between Beijing and Washington.
Noel Quinn, chief executive of HSBC, said the bank was leaving the U.S. mass market because it “lacked the scale to compete.”
“Our continued presence in the United States is key to our international network and an important contributor to our growth plans,” he said.
Greg Hingston, head of wealth and personal banking for Asia Pacific, said: “The United States plays a major role in HSBC’s growth strategy in Asia. Our renewed strategy in the United States will allow us to better serves the needs of our clients of international wealth, who continue to consider the United States for international education, property, investment diversification, career and family mobility, and business expansion. , among others “.
HSBC closed 80 of its U.S. subsidiaries last year, leaving it with a fraction of its network of rivals such as JPMorgan and Bank of America. Insiders have argued that the division’s lack of scale has made it more difficult to turn around, particularly during the coronavirus crisis and a period of ultra-low interest rates that have forced it to hunt for higher margin rates.