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HSBC sells chunk of US retail banking operations in push for Asia

·2-min read
 (Getty Images)
(Getty Images)

Investors today welcomed banking giant HSBC’s move to sell 80 of its bank branches on the east coast of the US as chief executive Noel Quinn looks to focus the sprawling group on its more profitable Asian operations.

HSBC has sold the branches specialising in retail and small businesslending to Citizens Financial in adeal that see $2.2 billion of loans and $9.2 billon of deposits transfer over.

It has also struck a deal with another US bank, Cathay, to sell its West Coast business, which includes $1 billion of deposits and $800 million of loans.

As part of that deal, the UK-based bank will retain a network of branches which it will turn into centres for its wealth management clients.

Quinn has always considered there to be merit in retaining some US presence to support its international wealth management clientele.

Like many banks, HSBC is shifting towards offering more services to the world’s wealthiest individuals. It is also doubling down the focus of the group on Asia, and has said the US is less of a focus, as is UK investment banking.

Analysts at Jefferies welcomed the US sales, telling clients: “These transactions, whilst very small in the context of HSBC, should contribute to streamlining the group and help reduce costs in the group HQ.”

However, he highlighted that some investors might be disappointed that the deals still did not represent a total withdrawal from US retail banking.

Quinn has been accelerating HSBC’s push into Asia, where returns are far higher than in the rest of the world.

While this has triggered concerns about having to toe the increasingly aggressive Chinese line towards its spiritual home of Hong Kong, the bank is widely seen as having to either go “all in” and kowtow to Beijing or sacrifice exciting profit potential in the region.

Quinn recently moved four of its top executives from London to Hong Kong including Nuno Matos, CEO of wealth and personal banking and Greg Guyett, co-head of global banking and markets in what were seen as significant signals of intent.

In February, Quinn pledged to “move the heart of the business to Asia, including leadership”, while at the same time deepening the cutbacks to is underperforming businesses in Europe and the US.

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