HSBC Will Close Down Its Loss-Making US Retail Banking Business And Focus On Asia

British mender HSBC will be exiting its mass market retail banking business in the United States, the bank has announced. It will be selling off some parts of the loss making business while the rest would be wound up. This is a part of the strategy of the company to focus on its business in Asia – its biggest market.

The move was long awaited by shareholders, analysts and market experts.  

It has been years that HSBC, the largest bank of Europe, has been trying to scale down its business in some of its European and North American markets because it has not been able to compete with the larger domestic banks on those markets.

HSBC will be exiting from retail banking for most individual and small business customers in the United States but will continue to have a small physical presence in the country to be able to cater to the needs of its international affluent and very wealthy clients, the bank said in a statement.

“They are good businesses, but we lacked the scale to compete,” Noel Quinn, HSBC group CEO, said in the statement.

A new strategy that is mainly focused on wealth management in Asia was unveiled by the bank in February. The bank at the same time was also be “exploring organic and inorganic options” for its retail banking franchise in the US.

The bank with its headquarters in London has been trying to move away from sub-scale markets and businesses as a part of the strategy developed by Quinn which also includes cutting down on costs throughout the group.

According to HSBC and separate statements from the two US-headquartered banks, HSBC’s east coast personal and small business banking business including 80 branches will be bought by Citizens Bank which is a part of Citizens Financial Group. The west coast business including 10 branches will be bought by Cathay Bank which is a subsidiary of Cathay General Bancorp.

None of the purchasing banks disclosed the money involved in the deals but HSBC said that it was expecting to have a pre-tax expenditure of $100 million related to the transactions.

According to the bank’s annual results, a loss of $547 million in 2020 was reported by the bank’s wealth and personal banking business in the US compared to a $5 billion profit in Asia – driven primarily by its profits obtained from Hong Kong which is the most profitable market for the bank.

In 2020, a profit of $573 million in the United States was named by the bank’s global banking and markets division, which includes the investment banking and large corporate businesses units.

“The markets will think this is quite neutral as we have been expecting it for a long time,” said Dicky Wong, executive director at brokerage Kingston Securities.

In the 1980s, its retail banking business in the US was expanded by HSBC as the bank embarked on a broader strategy of diversification of its geographical focus.

(Adapted from


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