HSBC considers complete exit from retail banking in the US

LaToya Harding
·Contributor
·2-min read
NEW YORK, NEW YORK - JUNE 17: Scene of an HSBC branch on Wednesday, June 17, 2020. According to Reuters news agency, HSBC, the biggest bank in Europe plans to eliminate 35,000 jobs worldwide, as it continues to struggle with the impact of the coronavirus. The value of HSBC stock has fallen by over 25% since the onset of the pandemic.  (Photo by Joana Toro/VIEWpress via Getty Images)
Senior management are looking to present the plan to the bank’s board in the coming weeks. Photo: Joana Toro/VIEWpress via Getty Images

HSBC Holdings (HSBA.L) is mulling a complete exit from retail banking in the US after narrowing the options for how to improve performance at its struggling North America business, the Financial Times revealed on Saturday.

Senior management are looking to present the plan to the bank’s board in the coming weeks, the newspaper said, citing people familiar with the matter.

The retreat from its operations in America, and move towards more profitable businesses in Asia, would mark the end of the bank’s 40-year long attempt to run a full-service, universal bank in the country.

One of the sources told the FT: “The jury is still out… we are examining the financial viability of the cost and the reward of exiting or having a middle strategy where we keep a smaller presence.”

READ MORE: HSBC axes 6,000 jobs so far this year as cost cutting accelerates

HSBC, which is Europe’s largest bank by assets, made a loss before tax of $518m (£389m) in the first nine months of this year in its US division. The year before it made a $279m loss and was $182m in the red in 2018.

Last month the lender announced plans to reduce its annual costs to below $31bn by 2022, a more ambitious target than it initially pledged in February and also well below the operating expenses of $42.3bn it reported last year.

It also outlined $4.5bn in cost savings and 35,000 job cuts from a global workforce of 235,000 earlier this year. In August HSBC boss Noel Quinn said the company would “accelerate” the restructuring plan.

“Our operating environment has changed significantly since the start of the year,” he said at the time.

HSBC has around 224 branches on the east coast of America and has already vowed to slash up to 80 of those sites in the February restructuring.

HSBC declined to comment to Yahoo Finance on Saturday.

Watch: What are negative interest rates?