The bank is repositioning its U.S. wealth and personal banking business towards international banking and wealth management.
HSBC has announced the sale of its domestic mass market retail banking business and retail business banking in the U.S. to Citizens Bank and Cathay Bank, which will take over 90 branches of its network of 148 branches.
Citizens Bank will acquire HSBC's East Coast retail banking businesses as well as the online bank portfolio, which includes 80 branches and approximately 800,000 customer relationships with $9.2 billion in deposits and $2.2 billion of outstanding loans as of 31 March 2021. Cathay Bank will acquire 10 branches on the West Coast, including 50,000 customer relationships with $1 billion in deposits and $800 million in outstanding loans.
New Chapter
«They are good businesses, but we lacked the scale to compete,» Noel Quinn, HSBC group CEO, said in an announcement on Thursday.
HSBC will convert its remaining physical locations into 20-25 wealth centers, and will wind down the residual branches, which will not be subject to sale or repurposing, the announcement said.
Quinn said HSBC will focus on its competitive strengths in the U.S., connecting its global wholesale and wealth management clients to other markets around the world.
Ongoing Overhaul
The downsizing of HSBC's U.S. business is part of a broader overhaul by the bank to cut costs and 35,000 jobs globally and focus on international clients, especially in Asia and the Middle East.
The bank is looking to reallocate capital to Asia, where it already generates the majority of its profits. It will deploy around $6 billion of additional investments over the next five years into the region, including $3.5 billion for its wealth business.
