Hey Harlem, HSBC Is Pulling Out Of U.S. Banking To Focus On Wealthier Customers

With a number of HSBC banks in Harlem, HSBC, the 14th largest bank in the U.S. and the sixth-largest bank in the world.

HSBC is pulling up its stakes in America and completely getting out of the retail banking market.

The bank’s new end game will be to reposition its U.S. Wealth and Personal Banking business with a focus on the more affluent crowd, especially those who are globally connected and have a high net worth.

“We are pleased to announce the sale of the domestic mass market of our US retail banking business. They are good businesses, but we lacked the scale to compete,” said Noel Quinn, Group Chief Executive of HSBC.

“Our continued presence in the US is key to our international network and an important contributor to our growth plans. This next chapter of HSBC’s presence in the US will see the team focus on our competitive strengths, connecting our global wholesale and wealth management clients to other markets around the world.”

How the deal shakes out

Pending regulatory approval, the company’s overall exit strategy includes:

• Exiting 90 branches out of a current branch network of 148 branches.
• Retaining a small network of physical locations in existing markets which will be repurposed into 20-25 international wealth centers.
• Winding down between 35-40 of its remaining branches.
• Exiting all Personal, Advance, and certain Premier banking customers (those with balances below $75,000).
• Exiting all retail business banking customers (small businesses with a turnover of $5 million and under).

Who gets HSBC’s current customers?

HSBC said its initial plan is a mixture of divestitures and a wind-down of its branch banking network.

The company has already lined up two buyers — Citizens Bank and Cathay Bank — to help with part of that.

Citizens Bank is buying HSBC’s East Coast market and retail banking businesses, as well as its online bank portfolio.

Citizens will get 10 additional branches, another 800,000 customers, and $9.2 billion in deposits in the deal.

Citizens will get 10 additional branches, another 800,000 customers, and $9.2 billion in deposits in the deal.

Cathay Bank, a Sino-American bank based in Los Angeles, California, is purchasing HSBC’s West Coast consumer and retail business banking.

That acquisition will add 10 branches, some 50,000 customers, and $1 billion in deposits to Cathay’s balance sheet. HSBC thinks its current customers will be happy with both Citizens and Cathay.

That acquisition will add 10 branches, some 50,000 customers, and $1 billion in deposits to Cathay’s balance sheet. HSBC thinks its current customers will be happy with both Citizens and Cathay.

“It was also important for us to find buyers who would be a good fit for our customers and employees,” said Michael Roberts, CEO of HSBC US and Americas.

The transactions are expected to close by the first quarter of 2022 reports Consumer Affairs.

The bottom line this means a loss of jobs in Harlem.

Photo credit: Google.