HSBC Holdings Plc exited its US domestic mass-market retail banking business, agreeing to sell 90 branches, as Europe’s biggest lender looks to focus on wealthy clients and steer billions of dollars in capital towards Asia.
The London-based bank will retain a network of 20 to 25 locations that will be transformed into international wealth centers, according to a statement. It’s closing 35 to 40 other branches. The bank expects a pretax cost of $100 million from the transactions. The move is part of a larger plan by HSBC to invest more in Asia, where it’s focused on banking the region’s wealthy, as the lender also looks at exiting businesses in Europe. The bank has announced it will cut about 35,000 jobs globally to boost profitability after years of struggling with rock-bottom interest rates.
“They are good businesses, but we lacked the scale to compete,” Chief Executive Officer Noel Quinn said in the statement. “Our continued presence in the US is key to our international network and an important contributor to our growth plans.”
HSBC has one of the largest U.S. businesses of any non-American bank, partly a result of its ill-fated acquisition of Household International in 2003, the subprime lender that ended up costing the company billions of dollars in writedowns.
