HSBC has announced that it will exit its US domestic mass market retail banking business.

The bank will instead reposition the business towards international banking and wealth management.

HSBC said that it plans to withdraw through a number of divestitures and the wind-down of its residual branch network.

This includes exiting 90 branches out of a current branch network of 148 branches.

HSBC Bank USA (HBUS) will retain a small network of physical locations in existing markets, which will be repurposed into 20 to 25 international wealth centres to serve the bank’s international customer base of 300,000 affluent and high net worth customers.

The remaining branches, around 35 to 40, will be wound down.

HSBC said it would exit all personal, advance, and certain premier banking customers – those with balances below $75,000.

The bank will withdraw from all retail business banking customers – small businesses with a turnover of $5 million and under.

HBUS has entered into sales agreements, subject to regulatory approval, with Citizens Bank and Cathay Bank for certain parts of the business.

Citizens Bank has entered into an agreement to purchase the East Coast domestic mass market and retail business banking businesses as well as the online bank portfolio, including 80 branches and approximately 800,000 customer relationships with S$9.2bn in deposits and $2.2bn of outstanding loans.

Cathay Bank has entered into an agreement to purchase the West Coast domestic mass market and retail business banking businesses, including 10 branches and approximately 50,000 customer relationships with $1.bn in deposits and $0.8bn of outstanding loans.

The US branch will reposition its wealth and personal banking business to focus on the banking and wealth management needs of globally connected affluent and high net worth clients.

“We are pleased to announce the sale of the domestic mass market of our US retail banking business,” said Noel Quinn, group chief executive, HSBC. “They are good businesses, but we lacked the scale to compete."

Quinn added: “Our continued presence in the US is key to our international network and an important contributor to our growth plans. This next chapter of HSBC’s presence in the US will see the team focus on our competitive strengths, connecting our global wholesale and wealth management clients to other markets around the world.”

The announced transactions are expected to close by the first quarter of 2022, subject to regulatory approvals.

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