HSBC Holdings Plc is planning to pull out of all retail banking in the United States, continuing its years-long pivot to its Asian roots and refocusing its business toward wealthier and business clients as it retreats from the American consumer.
The British banking giant – whose U.S. predecessor Marine Midland Bank was based in Buffalo – said Tuesday that it is withdrawing from its U.S. consumer banking business, confirming an earlier report by the Reuters news service. The company plans to remain active in U.S. wealth management, investment banking and corporate banking.
Executives of the London-based bank said that they were exploring a sale of HSBC's remaining 150 branches in major cities across the U.S., including in and around New York City, Philadelphia, Washington, Miami, Los Angeles, San Francisco and Seattle.
The franchise also includes two branches in the Buffalo area – one at HSBC's Depew service center at Dick Road and Walden Avenue, and one in Amherst at 8100 Transit Road, at Maple Road – both of which were opened in the last two years.
That is all that remains of HSBC Bank USA's branch network, which numbered more than 470 locations just over a decade ago. It was the dominant bank in Western New York, vying with M&T Bank Corp. for supremacy across the upstate region.
Banks cite customers' growing preference for doing more things digitally, as well as fewer visitors and transactions inside branches, as reasons for closing locations.
But after years of expansion in the New York City area and then in other major cities from coast to coast, HSBC announced in May 2011 that its upstate branch business was no longer a core part of its business, and agreed two months later to sell all 195 branches to First Niagara Financial Group for $1 billion. (Buffalo-based First Niagara, which sold some of those branches to other banks, was later acquired by Cleveland-based KeyCorp.)
That sale left HSBC with about 265 branches – 165 in downstate New York and the rest in concentrated pockets of 11 other states.
The latest move follows additional reductions by HSBC to its U.S. branch network, including last year, when it cut its branch count by 30% as part of a larger restructuring and cost-cutting initiative designed to shave $4.5 billion in expenses by 2022.
As part of that strategy, the bank said that it had reduced expenses by $1 billion and riskier assets by $52 billion during the year. It also reduced staff by 11,000 positions, slimmed down its senior management and combined its wealth and personal banking into one division. HSBC also said Tuesday it would sell its 200-branch French consumer bank.
"Last February, I promised we would deliver our plans with pace and conviction," HSBC Group CEO Noel Quinn said. "The plans we are announcing today will build on this work."
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Going forward, Quinn said, HSBC will focus on its strengths in cross-border banking, middle-market corporate banking and wealth management, particularly in Asia. The company also said it would invest in technology, will emphasize sustainability as it shifts to become a "net-zero energy" bank, and would stress inclusion and diversity in its ranks.
The announcements came as HSBC announced 2020 profits before taxes of $8.8 billion, down 34% from 2019, and adjusted pre-tax profits of $12.1 billion, down 45%. Net income fell 35% to $3.9 billion, while total revenues fell 8 percent to $50.4 billion.
For the fourth quarter, the bank swung back to a profit of $562 million after reporting a loss of $5.5 billion in the fourth quarter of 2019.
HSBC said it provided $52 billion in lending support through government programs in response to Covid-19, along with $26 billion in relief for personal customers and $1.9 trillion in loans, debt and equity support for wholesale customers.
"Our people provided amazing support to our customers and the communities we serve around the world," Quinn said. "They delivered repeatedly in the toughest of circumstances."
HSBC also announced reinstatement of a 15-cent-per-share dividend, after suspending it a year ago at the request of the British government when the Covid-19 pandemic hit.