HSBC exited its mass market US retail banking business to focus on using capital towards their ‘international wealth clients’ across Asia. The bank will exit 90 of their 148 branches, retain a network of 20-25 branches that will be transformed into international wealth-centers and wind down the remainder. Overall pre-tax transaction costs are expected to be $100mn. CEO Noel Quinn said, “They are good businesses, but we lacked the scale to compete. Our continued presence in the US is key to our international network and an important contributor to our growth plans.” A Jeffries analyst said, “These transactions, whilst very small in the context of HSBC group, should contribute to streamlining the group…Investor pushback is likely to major on the fact that in these transactions, HSBC is not fully exiting U.S. retail.”
HSBC’s bonds were stable – its USD 6.25% Perps were at 105.8, yielding 2.96%.
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