HSBC is withdrawing from the US retail banking market and selling parts of the loss-making business as it shifts its focus to Asia.
The bank has long been trying to shrink its presence in some North American and European markets because it has struggled to compete with larger domestic players.
In February HSBC unveiled a new strategy focusing mainly on wealth management in Asia while “exploring organic and inorganic options” for its US retail banking business.
In a statement overnight the bank said it would withdraw from the market for most individual and small business customers but retain a small physical presence to serve its affluent and very wealthy clients.
“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,” chief executive Noel Quinn said.
HSBC’s US wealth and personal banking business made a loss of $547m in 2020, according to its latest annual results, versus a $5bn profit in Asia.
The bank said it expected to incur pre-tax costs of $100m connected with the transactions, after which it does not expect to generate a significant gain or loss.
“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.”
HSBC has already completed a restructuring of its US operations last year, in a move which shut around 80 banks.
Quinn’s revised strategy also includes the sale of its French retail banking operations, and has entered final negotiations to sell it to private equity firm Cerberus, Reuters reported in March.