HSBC Holdings is exiting its U.S. domestic mass market retail banking business, agreeing to sell 90 branches, as Europe’s biggest lender seeks to boost profitability.
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 pivot its business more to Asia with the lender also looking 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,” CEO Noel Quinn said in the statement. “Our continued presence in the U.S. 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.
It’s also in the process of selling its French retail unit. The sale, which the bank started preparing in 2019, is now in the final stretch as Cerberus is the last remaining candidate to buy the asset.
HSBC agreed to sell 80 of its branches to Citizens Financial Group in Providence, Rhode Island. Citizens will pick up about $9 billion in deposits and $2.2 billion in loans as part of the deal. The price wasn’t disclosed.
Cathay Bank in Los Angeles agreed to buy HSBC’s West Coast domestic mass market and retail businesses, including 10 branches and about 50,000 customer relationships.
