HSBC exits loss-making US retail banking as part of Asia pivot

HSBC announced it is withdrawing from US mass market retail banking by selling some parts of the money-losing business and winding down others, a long-awaited move as the lender steps up a shift in focus to Asia, its biggest market. Europe's biggest bank has for years been trying to shrink its presence in some European and North American markets where it has struggled against competition from larger domestic players.

The bank said in a statement late on Wednesday (May 26) it would exit retail banking for most individual and small business customers but retain a small physical presence in the US to serve its international affluent and very wealthy clients. "They are good businesses, but we lacked the scale to compete," Mr Noel Quinn, HSBC group chief executive, said in the statement.

HSBC unveiled in February a revised strategy focused mainly on wealth management in Asia, and at the same time said it was "exploring organic and inorganic options" for its US retail banking franchise.

As part of Mr Quinn's game plan that also involved slashing costs across the banking group, the London-headquartered bank has been looking to step back from sub-scale markets and businesses. HSBC is also seeking to sell its French retail banking operations as part of the same strategy, and has entered final negotiations to sell that business to private equity firm Cerberus, Reuters reported in March.

Citizens Bank, part of Citizens Financial Group, has agreed to buy HSBC's east coast personal and small business banking business including 80 branches, and Cathay Bank, a unit of Cathay General Bancorp, has agreed to buy its west coast business including 10 branches, according to HSBC and separate statements from the two US-headquartered banks.