Sunday's announcement that HSBC Bank USA was selling its entire upstate New York branch network to First Niagara Financial Group ended speculation about what would happen to those branches, customers and employees.
But it left other questions still unanswered about the rest of HSBC's operations in Western New York, where the bank's roots date back 150 years to the founding of Marine Trust Co., later Marine Midland Bank, which HSBC acquired in 1980.
HSBC employs nearly 6,000 in Western New York, including 4,000 in Buffalo itself and about 1,000 at its mortgage operation in Depew, plus the branches.
It occupies about three-fourths of One HSBC Center, the downtown tower that bears its name, and owns the HSBC Atrium building a block away. And it paid to put its name on HSBC Arena, home to the National Hockey League's Sabres.
However, its commitment to the region has been under a cloud for over a year after it launched a search for new office space in Western New York, even raising the specter that it could leave downtown Buffalo because the tower no longer suited its needs. It then abruptly abandoned that search in May when parent HSBC Holdings Plc announced a global strategy change and instead put its upstate branches and U.S. credit card business up for sale.
HSBC early this morning is reporting its second-quarter earnings, which analysts expected to come in at $10.9 billion. It's also widely expected to announce plans to cut about 10,000 jobs globally, or about 3 percent of its 307,000 employees in 87 countries and territories, although it's not clear if any of those jobs would be local.
Sunday, after announcing the branch sale, HSBC sought to address some of the remaining uncertainty locally. "HSBC is committed to the U.S.," said Niall Booker, group managing director and HSBC North America CEO. "We've been proud to serve the upstate New York community for many years and look forward to continuing our engagement in the region through a strong commercial and corporate banking presence."
The sale to First Niagara includes 195 branches, $15 billion in deposits, $15 billion in assets, $2.8 billion in small business, mortgage and consumer loans, and $4.3 billion in retail brokerage assets under management. It also includes 1 million accounts, 650,000 retail customers and 250,000 credit card accounts, plus 1,900 employees across the region.
"We are also working with First Niagara to determine their additional staffing needs," said HSBC spokesman Neil Brazil.
But the deal does not include HSBC's commercial banking, corporate and investment banking or private banking businesses in upstate New York, much of which is based or coordinated out of Buffalo, long considered one of the bank's global hubs for multiple functions.
"Buffalo is an operational center for HSBC. We have a number of different business lines being supported out of those buildings," Brazil said.
Indeed, HSBC reaffirmed its commitment to those businesses, saying it will continue to provide a "full suite" of commercial banking services, including trade and cash management products and services, through four business centers in Buffalo, Rochester, Syracuse and Albany.
"We're reaffirming our focus on commercial banking in the upstate market," Brazil said. "We will be looking to actively market and serve commercial customers."
More significantly, Brazil said the bank is "currently undergoing" a multimillion-dollar refurbishment of the Atrium building, which will house nearly 2,000 employees when it is completed. That's up from 1,200 now. "We are pleased to be investing in creating a more efficient upgraded facility for our employees," he said.
As for the tower, Brazil reiterated that the bank's "intention is to remain in the tower for the time being and until further notice." He noted that the current lease expires in October 2013 but would not comment on any plans to renew it.
And the bank's "strategy review" of its mortgage business in Depew is still ongoing, he said.
Finally, Brazil would not comment on the bank's "ongoing communications" regarding the HSBC Arena, which he called "proprietary," but "we're looking forward to a continued relationship with the Sabres."