The big news from First Niagara Financial Group should be viewed as a positive development for Western New York.
The bank has agreed to purchase, for $1 billion in cash, 195 HSBC Bank USA branches across upstate New York and Connecticut. The move will give First Niagara thousands of new employees and customers and perhaps make it the No. 1 bank in Western New York.
The announcement will provide some relief to HSBC's employees, who have been worrying about their futures since HSBC put the branches up for sale in May. They now know their new owner is already headquartered here and heavily invested in making the community better.
While First Niagara won't keep all 195 branches, it expects that most of the 1,900 jobs at the branches will be retained by First Niagara or another bank. The U.S. Justice Department may require First Niagara to sell some branches to maintain competition, and the bank reportedly isn't interested in HSBC's branches in the North Country.
Although an outside bank would have injected more competition in the Western New York banking market, always a plus for consumers, First Niagara has proven that it is committed to Buffalo and Western New York. In just one example of First Niagara's good corporate citizenship, the bank stepped forward last year to save the Empire State Games held in Buffalo.
First Niagara President and CEO John Koelmel has said, "Buffalo and Western New York will always be at the heart of our corporate success." He's been proving that as the bank continues to grow and add jobs in the area.
Just a few months ago, the bank added 500 new high-paying jobs, adding to its reach from Buffalo to Boston, and south through Pittsburgh, Philadelphia and Connecticut. Those jobs were in addition to the 500 created in upstate New York over the past couple of years. And there may be more to come.
The growth of First Niagara affects Western New York in a positive way. This new acquisition will give a soaring First Niagara, currently ranked as the No. 3 bank in the region, a stronger foothold as it acquires almost all of HSBC's retail banking presence in the Empire State north of New York City, including 71 offices in the Western New York area, plus six branches in Connecticut. The growth of the bank in now-lightly served areas such as Rochester, Syracuse and Binghamton adds greatly to its strength in Buffalo and Albany.
First Niagara has joined M&T Bank, also headquartered here, in playing critical roles as good corporate citizens in this community.
M&T Bank is one of the area's most generous patrons of culture, the arts and education. It led the rebirth of the Westminster Community Charter School, and also recently announced that it would add 133 new jobs to the 5,000 jobs the bank already has in Western New York. Some 1,800 of those jobs have been created since 2000.
M&T ranks 23rd among all U.S. banks, 15th among general commercial banks based in the United States and not foreign-owned. It is the No. 2 bank in Buffalo, behind HSBC. First Niagara will move up sharply from its current rank as 36th-biggest bank in the United States, 21st among general commercial banks based in the United States, when it formally acquires HSBC's branches.
First Niagara and M&T are the opposite of HSBC in many ways important to the community. They are locally managed, wheras HSBC has no one here with any real authority.
Both First Niagara and M&T have executives you can talk with in making important local decisions. Those executives are constantly aware of what they are doing for the community and their image. And they make sure that image is positive. HSBC officials project the impression that they aren't concerned about image.
It will be interesting to see what HSBC does now in Western New York. Will there be a local person with some authority? Will the bank demonstrate its interest in the community and be a leader in that sense?
HSBC's advertisements boast that it is your "local" bank. It has an opportunity to prove that in Western New York, where it has more than 4,000 employees, many of them in the HSBC Center tower and HSBC Atrium downtown.
HSBC Holdings Plc announced Monday that it would cut more than 30,000 jobs globally, despite higher first-half pretax profits. Fortunately, the U.S. bank's chief executive officer has indicated that the worldwide job cuts should not affect its Buffalo operations.
Retaining HSBC's major presence in commercial, corporate and private banking would be a huge plus for the region.
First Niagara, headquartered in Buffalo's Larkin District in the Larkin at Exchange Building, has been an integral part of the revival of that area. The new acquisitions should position the bank to continue to be a community leader in Western New York.
As Gov. Andrew M. Cuomo pointed out, given the possible losses from the HSBC divestment in New York, " this is the best outcome for HSBC's employees and branches across the state."
It was a sentiment echoed by County Executive Chris Collins, who viewed the news " as good as it can be for Western New York with a locally owned bank acquiring those branches."