Source: Financial Times.
Exiting the American market seems to be trendy for international banks. In the latest move, HSBC might exit retail banking business in North America, according to Financial Times.
Reason? Too hard to compete… If you live in North America, you’d rather choose Chase or BOA as your primary bank account but not HSBC, as the number of HSBC branches is limited. You don’t want to take a plane/drive for 6 hours only for visiting the branch.
- Instead, HSBC America’s retail is more used by international clients who are using HSBC primarily, like those living in Hong Kong and the UK, but not local residents.
Restructuring might go all the way
The move, indeed, is only a little part of its restructuring programme that was paused by the coronavirus pandemic. The main goal: shifting back to its birthplace Asia, where half of its revenue comes from.
- By 2022, HSBC plans to slash its operating cost by 30%, with 35k of its global employees to be laid off.
- Something positive? Instead of selling its entire US operation, HSBC is only considering the US retail network while keeping investment banking and private banking lines. Perhaps this is the only positive news here….
Zoom out: After exiting North America’s retail banking, HSBC’s vision of running a universal bank will be hard to achieve. Simply, you don’t want to bank with an “international” bank without covering America.