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Capital One was already in the process of buying ING’s U.S. online banking business for $9 billion. Its premium on the HSBC deal would be $2.6 billion.
August 10 -
Buffalo bank's deal for 195 HSBC branches will require raising capital, divesting and integrating technology. Execs insist it’s all manageable.
August 1 -
Soft but steadily improving earnings in the United States show that two of Europe's biggest banks — HSBC Holdings PLC and Royal Bank of Scotland PLC — have put their worst problems here behind them.
November 5 - WIB PH
HSBC Holdings has operations in 88 countries and its stated mission is to help its commercial and high-net-worth customers do business in all of them.
October 1
Selling off profitable businesses and bank branches is painful. So is figuring out how to grow without them.
Irene Dorner, president and chief executive of HSBC's U.S. bank, is saying goodbye to some of her unit's most reliably profitable assets after its British parent company decided that they no longer fit into its global strategy.
This summer
"It's not without some emotion," she says in an interview this week, adding that the deals to sell both sets of assets were "tough decisions."
But Dorner, who American Banker Magazine just
HSBC agreed in August to sell the credit card portfolio to Capital One Financial Corp. for a $2.6 billion premium. In July, it agreed to sell its upstate New York branch network to First Niagara Financial Group for about $1 billion. That deal will leave HSBC with about 260 U.S. branches,
Both sales are expected to close in early 2012 and will "free up a lot of capital," Dorner says. HSBC
The British banking giant is trying to connect that region with its successful businesses in Asia, where HSBC is "very much part of the furniture and fabric," she says.
Now HSBC wants to capitalize on the close family, work and travel ties between its Asian customers and those on the West Coast. As part of its strategic realignment, "we are now understanding that the West Coast fits into HSBC's strategy," says Dorner, who ran HSBC's Malaysian operations before taking over the U.S. bank in 2010.
She has some catching up to do in this country. With just 41 branches on the West Coast, Dorner admits that HSBC's brand is less known in the U.S. than it is abroad, where the bank has operations in 80 countries.
"We're never going to measure success by our branches," Dorner says. "But we are in growth mode."
HSBC is looking for that growth particularly from wealthy customers. It is expanding its Premier business, which gives customers special perks in return for at least $100,000 in investments and deposits.
But the company is also
Dorner and other HSBC executives tout the bank's expertise in trade finance, foreign exchange and payments, claiming it has a "sweet spot" for the affluent, international customer.
Arjan van den Berkmortel, an HSBC executive vice president and regional president of West Coast and Texas, says HSBC bankers can easily make introductions for corporate clients by simply calling their counterparts abroad to help "ease the entry of companies into a market."
The strength of HSBC's California rivals "is domestic, not in helping the customer who is either based overseas or who wants to do business there," says van den Berkmortel.
Dorner is not the only HSBC executive trying to build up her operations despite cutbacks. The company's new global strategy includes a massive cost-cutting effort with expected layoffs of up 30,000 employees worldwide.
Like other U.S. bankers, Dorner is also unhappy with the increased regulation facing her industry, and blames regulators for drawing out rule-making and "taking too long for the impact of regulations to be felt."
She cites last year's Dodd-Frank Act as one example of regulations going at a snail's pace because "authorities have yet to come out with the specifics."
"What's killing banks is uncertainty," she says. "If you don't know what level of capital you're holding and by what date, then the banking system will go slow because it doesn't know when to take risks."
