HSBC is winding down much of its US business to turn its attention to richer clients.
The British bank announced Wednesday that it was closing most of its retail banking locations in the country, reducing its current footprint from 148 branches to about 25. Those that will remain will be turned into international wealth management centers.
While HSBC will remain in the United States, its team there will switch the focus of its retail business to “international banking and wealth management” — and specifically the “needs of globally connected affluent and high net worth clients,” it said in a statement.
The decision to pull back was widely anticipated. HSBC has repeatedly warned of the need to cut costs in recent years, especially in the United States, where it has long struggled to gain a foothold among everyday consumers.
“We are pleased to announce the sale of the domestic mass market of our US retail banking business. They are good businesses, but we lacked the scale to compete,” CEO Noel Quinn said in the statement.
“This next chapter of HSBC’s presence in the US will see the team focus on our competitive strengths, connecting our global wholesale and wealth management clients to other markets around the world.”
The London-based lender is now planning to sell off chunks of its business to other US players.
It said Wednesday that Citizens Bank, for example, which is based in Rhode Island, had agreed to buy its retail unit on the East Coast, as well as an online portfolio, which spans roughly 800,000 customers and 80 branches.
Over on the West Coast, Cathay Bank, which bills itself as the “oldest operating bank” in the country founded by Chinese Americans, plans to purchase HSBC’s retail operations, which includes 10 branches and roughly 50,000 customers.
Both deals are pending regulatory approval.
HSBC, which makes most of its money in Asia, has been increasingly shifting resources to the region lately.
The bank told investors earlier this year that it was planning to “step up” its investments there by about $6 billion, with a focus on China, Southeast Asia, and India as “key drivers” of its future growth.
The company specifically wants to build up its presence in mainland China, defend its leading position in Hong Kong, and establish Singapore as a wealth management hub. And it remains bullish on India, which produced $1 billion of profit for the bank last year.
HSBC is also relocating some key personnel. Last month, it said that it would move four of its top executives to Hong Kong later this year, though a spokesperson confirmed that both Quinn and chief financial officer Ewen Stevenson would stay in London.