Citizens Bank and Cathay Bank will raise more than $ 10 billion in deposits and 90 branches as part of HSBC’s plan to exit the US retail banking sector.
HSBC announced the plan this week, with Citizens Bank and Cathay Bank poised to take over the branch networks on the east coast and west coast, respectively.
In a statement, HSBC said the exit was the result of a lack of competitiveness in the marketplace and a desire to expand its global wealth management capabilities.
Noel Quinn, CEO of the HSBC Group, said: “[The retail branches] are good deals, but we lacked the size to compete. Our continued presence in the USA is the key to our international network and an important contribution to our growth plans. “
HSBC closed 80 stores in the US in the first few months of the pandemic and only opened one new location. In addition, the Financial Times reported in November last year that the financial services giant’s North American business was in poor shape.
HSBC now plans to advance its efforts in its most competitive area – wealth management – with a particular focus on high net worth clients in Asia.
Citizens Bank will buy HSBC’s East Coast retail banking and HSBC’s online banking portfolio. This includes 80 branches and 800,000 customer relationships with deposits of $ 9.2 billion and a loan portfolio of $ 2.2 billion.
“This transaction offers us an attractive entry into the important markets of New York City Metro, Washington DC and Southeast Florida,” said Bruce Van Saun, Chairman and CEO of Citizens Bank.
Separately, Cathay Bank will acquire the West Coast retail banking business, including 10 branches and 50,000 customer relationships. The purchase adds $ 1 billion in deposits and approximately $ 800 million in outstanding loans.
HSBC’s move also includes the conversion of several remaining locations into 20-25 “international wealth centers”. Another 35-40 branches are being processed.
All retail customers with less than $ 75,000 in credit will be deducted, as will all retail customers, including small businesses with revenues of $ 5 million and under.