HSBC Weighs Shutting US Retail Banking Unit

HSBC Group is considering shuttering its U.S. retail banking operations after four decades trying to build a strong presence in the country, the Financial Times (FT) reported.

FT based its report on unnamed sources, stating the bank is weighing “a complete exit from retail banking in the U.S. after narrowing the options for how to improve performance at its struggling North America business.”

The bank declined to comment, FT reported.

The British bank’s board is likely to take up the proposal within weeks — and that if it does withdraw from the U.S., resources are likely to be re-deployed in Asia, according to the report.

FT further reported that HSBC executives have been reconsidering what to do with the U.S. operations as the bank seeks to expand on cuts that already have been announced as likely to involve $4.5 billion in paring and the elimination of 35,000 jobs.

Many banks have been hit hard by the combination of pandemic-related economic shrinkage and low interest rates, FT reported. The situation is serious enough that exiting retail banking in the U.S. completely and moving to a digital-only model in the country could make sense, one unnamed source told 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,” a source said, according to FT.

FT reported that HSBC is likely to retain its investment banking operations in the United States, but possibly not certain client relationships that are less profitable than others.

This calendar year, according to FT, HSBC has closed 80 branches in the United States, leaving 150 on the East and West Coasts.