Fraught by a series of PR challenges and market pressures, HSBC is shifting focus to Asia and other untapped markets.

 HSBC Bank is closing down in USA and France. Is Canada next?

HSBC has taken the tough decision to close down much of its USA business- turning its attention to Asia and richer clients.  Referring to titans like JP Morgan Chase, HSBC’s CEO Noel Quinn said in a statement: “They are good businesses, but we lacked the scale to compete.”

France is also on the chopping block, with HSBC divesting its business assets in the European hub, at a $2.3 billion loss. Now, finance pundits are wondering- is Canada next in line for closure?

HSBC reduced its retail banking locations in the US from 148 branches to about 25. Those that will remain will be turned into international wealth management centers. While HSBC will remain in the USA, its team there will switch the focus of its retail business to “international banking and wealth management — and specifically the needs of globally connected and high net worth clients.”

 HSBC Bank is closing down in USA and France. Is Canada next?

In France, HSBC has just sold its French retail bank to My Money Group at a substantial loss, demonstrating its eagerness to offload the France operation. The sale is another significant step in a wider retreat from slow-growing European and North American markets where it has struggled against larger domestic players.

The story is the same in the UK. Despite the formidable brand reputation built over the years, HSBC is scaling down there as well. Earlier this year, the banking giant announced it was closing 82 branches across the UK in a radical shake-up of its network.

HSBC said the closure decisions have been made in response to market trends, customer behavior, and branch usage. ‘Making sure we have a sustainable branch network is essential to us, and decisions to close branches are not taken lightly.

HSBC is also relocating some key personnel. Last month, it said that it would move four of its top executives to Hong Kong later this year, though a spokesperson confirmed that both Chief Executive Quinn and chief financial officer Ewen Stevenson would stay in London.

These market exits follow a decade of PR nightmares for the strongly branded bank. In 2012, HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities on money laundering charges. According to the U.S. Justice Department, Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel laundered $881 million between them through HSBC and a Mexican unit.

In remorse, the company vowed to do better. In a statement, Stuart Gulliver, former Group Chief Executive, said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and will not do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes.”

Is Canada next in line for HSBC exit?

HSBC has 130 locations in Canada. It is the biggest foreign- owned bank in the country and it employs over 6000 people. Last year HSBC announced that it was shedding over 35,000 jobs across the world as it tried to cope with a flurry of global uncertainties.

HSBC is a strong mortgage player in the Canadian banking scene. HSBC mortgage rates are by far some of the most competitive in the nation. HSBC at times posts mortgage rates that even brokers can not touch.

A spokesperson for HSBC in Canada had earlier stated that: “Here in Canada, as we have done for several years, we are continuing our work to make the bank more efficient and serve our customers well, adapting to new ways of working and introducing new technologies to respond to how our customers want to bank with us. As we do so, we will maintain our disciplined approach to managing our costs and headcount, ensuring our costs are appropriate to our revenues as we always have.”

HSBC employees in Canada which includes a good number of highly skilled immigrants will be hoping that there are no hidden dangers embedded in these fine words.

Sources:

CNN

Reuters

HSBC

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