Europe’s second-largest bank by assets said on Wednesday it would sell most of its branches on the U.S. east and west coast to Citizens Bank and Cathay Bank, respectively, as part of a plan to implement some $4.5 billion of cost cuts, shed 35,000 jobs worldwide and shift its main focus to Asia.
- The sales bring to an end HSBC’s long and unprofitable effort to become a major player on the U.S. banking market. “We lacked the scale to compete,” acknowledged Chief Executive Noel Quinn in a statement.
- HSBC HSBA, -0.31% said it would keep serving its “globally connected affluent and high net worth clients” in the U.S. through “a small network” of 20 to 25 locations.
- The U.K.-Asian bank is also in talks with U.S. private-equity fund Cerberus Capital Management to unload its loss-making French operations.
- HSBC lost $547 million in wealth management and personal banking in the U.S. last year, compared with the $5 billion profit it made in Hong Kong and the rest of Asia.
The outlook: HSBC’s decision to end its long period of suffering in the U.S. was expected. But the increased focus on Asia brings the bank closer to some form of alignment with the interests of the Chinese government — with the increased risk of becoming a punching ball amid rising international tensions.