Shrinking World

Once billed itself as “The World's Local Bank”!

HSBC Holdings plc, a British multinational bank and financial services holding company; with a strong diversified international presence; one of the largest banks in the world, and largest bank in Europe by total assets, appears to be shrinking its presence wherever it sees itself as too bloated, and exiting where it is sub-scale compared to local players, spurred on by pressure from its biggest shareholder, “Ping An Insurance Group of China”, who, told it to consider spinning off its profitable Asian operations centered on the Hong Kong SAR.

As per the WSJ, HSBC will exit most of its U.S. retail banking business through several transactions to two U.S. regional banks, Citizens Financial Group Inc.’s “Citizens Bank” and Cathay General Bancorp’s “Cathay Bank”, pending regulatory approval, reducing its current footprint from 148 branches to about 25. Those that will remain will be turned into international wealth management centers.

The Guardian avows that, HSBC is quitting Canada, by announcing the sale of its Canadian business to “Royal Bank of Canada” (RBC).

According to Reuters, HSBC agreed to sell its French retail bank 244 branches and 24 billion euros in assets, to Cerberus-backed My Money Group’s “My Money Bank”.

Reuters said, HSBC will also seek to sell its banking business in Turkey if it can find a local buyer, the sources said, adding that no final decision has yet been taken.

Reuters added, HSBC also announced a possible sale of its small New Zealand business.

Bloomberg stated that, HSBC has agreed to sell its Russia business and has signed an agreement to sell 100% of its participating interests in HSBC Bank (RR) LLC to “Expobank JSC”, a spokesperson for the bank told Reuters. Completion of the deal would represent HSBC's formal exit from Russia.

BBC revealed that, HSBC plans to close 114 branches in Britain from April 2023. The move will leave HSBC with just 327 branches in Britain, down from 625 in 2017 and 965 branches at the end of 2016.

Reuters affirmed that, HSBC exited the Indian private banking business in 2015, it also , closed 24 branches in 15 Indian cities, as of, September 17, 2022, ownership of accounts will transfer to “First Bank & Trust”, and servicing will transfer to “PF|CP”. The network actually consolidating 50 branches across 29 cities to 26 branches across 14 cities.

HSBC Bank Middle East Ltd, operating in Lebanon since 1946, sold its operations in Lebanon to “BLOM BANK”.

HSBC Bank Middle East Limited, established in Jordan since 1949, sold as well its banking business in Jordan to “Arab Jordan Investment Bank plc” (AJIB).

After a 70-year presence with 10 branches in the sultanate of Brunei; HSBC Brunei shuttered the doors on its flagship branch in Bandar Seri Begawan, winding down operations in Brunei Darussalam, after selling its retail and commercial banking portfolio to “Baiduri Bank”, all remaining branches ceased operations.

HSBC Bank Brasil S.A. - Banco Múltiplo, as formally known, among the top 3 banks in Brazil, with more than 1,700 branches and sub-branches in 550 Brazilian cities, sold off the majority of its operations in Brazil, including personal banking, to “Banco Bradesco”.

HSBC Latin America Holdings Limited, a wholly owned subsidiary of HSBC Holdings plc, also sold its Panamanian subsidiary HSBC Bank (Panama), in an all-cash deal, to “Bancolombia SA BIC.CN”, Colombia's largest lender by assets.

HSBC seems to continue shrinking its global footprint. "RIP to the Era of Global Banking", said Bloomberg, as finance joins the retreat from globalization, for better or worse…

Food for thought!

Disclaimer: Information, facts or opinions expressed in this article are presented as sourced from published news and do not reflect views of the author and hence the author is not responsible or liable for accuracy, completeness, suitability and validity of any information in this article.