Nearly seven years ago, HSBC Bank sold off its upstate branch network, after deciding the slow-growth region didn't fit its focus on fast-growing areas.
Now, in an abrupt about-face, HSBC has signaled it wants to return to retail banking here.
The bank has asked federal regulators for permission to open a branch at 2911 Walden Ave. in Depew, at Dick Road. The location is logical for HSBC: one of the bank's two major operations centers in the region is at that intersection.
“We are committed to the Buffalo region, have deep roots to the community and recognize the strong financial services skills available in the local work force,” said Pablo Sanchez, head of retail banking and wealth management for HSBC in the U.S. and Canada. “Our application with (federal regulators) to open a new branch is pending approval, and our initial goal is to provide personal banking services to new and existing customers, including our employees.”
HSBC did not provide details about its proposed Depew branch, or its broader plans for retail banking in the region.
HSBC lost street-level visibility here when it sold off its 195-branch network in upstate New York and Connecticut to First Niagara Financial Group.
The sale ended a banking relationship between the Buffalo Niagara region and a company whose roots stretch back to the days of Marine Midland Bank, which HSBC acquired. HSBC later moved out of the downtown tower than once bore its name and logo.
Even so, HSBC still has a large presence in the Buffalo Niagara region, even if it no longer is a player in the banking market.
HSBC still has about 3,000 employees between its operations centers in Depew and at the Atrium in downtown Buffalo, next to KeyBank Center. The bank a few years ago opened financial services centers inside those two locations to serve employees, but those were still short of being full-service branches.
The retail banking landscape in the Buffalo area has changed a lot since HSBC finished selling off its upstate network to First Niagara in 2012. HSBC's deal helped set in motion those changes.
From 2001 through 2010, HSBC led the Buffalo Niagara region in deposit market share, according to Federal Deposit Insurance Corp. data. M&T now owns the top spot.
The $1 billion deal for HSBC's upstate branch network propelled First Niagara to greater prominence. But the high cost was among the factors that led First Niagara to give up on staying independent and be sold to KeyBank, in 2016. Key took over the No. 2 spot in deposits locally, and has strengthened its local presence.
Banks have seized on the "market disruption" created first by the sale of HSBC's branch network, and then Key's purchase of First Niagara. Bank on Buffalo, Tompkins Bank of Castile and Steuben Trust has each opened their first local branches. Others have bolstered their downtown presence.
If HSBC goes on to add more local branches, the bank faces the challenge of reclaiming customers in that increasingly competitive environment.