HSBC Holdings PLC will stop serving mass-market individual customers and smaller businesses in the U.S., exiting the bulk of a retail business that has long struggled to compete with America’s big banks.
The bank said that it will sell 90 of its 148 branches in the U.S., and plans to wind down another 35 to 40. HSBC agreed to sell parts of its business to two U.S. regional banks, Citizens Financial Group Inc.’s Citizens Bank and Cathay General Bancorp’s Cathay Bank.
HSBC said it will retain around two dozen locations, which will become international wealth centres providing banking and wealth-management services to high-net-worth clients. A spokeswoman said these centres would be in cities such as New York, Washington, D.C., San Francisco, Seattle, Los Angeles and Miami.
It will go from about 1.4 million customers to roughly 300,000 in the U.S. It will no longer service customers with basic bank accounts, or those with balances below $75,000, and businesses with turnover of $5 million or less.
The shift will let HSBC focus on its competitive strengths, HSBC Group Chief Executive Noel Quinn said, adding that the bank’s U.S. mass retail operations are good businesses but lack the scale to compete.