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HSBC is reviewing its retail banking operations outside the UK and Hong Kong, a move that could see it significantly reduce its operations in countries including Mexico, as it seeks to further cut costs.
The bank is looking at locations outside its core markets where it can reduce its consumer presence and focus on wealthier “premium” clients, according to people familiar with the discussions.
One market under review is Mexico, a country that HSBC entered more than two decades ago, but which has a fraught history including being fined more than $2 billion by US authorities in 2012 for failures that allowed drug cartels to launder hundreds of millions of dollars. of dollars.
Douglas Flint, HSBC's chairman at the time, said the bank was “humble” and that the board took full responsibility for the failures.
Since then, HSBC – which came to the country through its acquisition of Grupo Financiero Bital in 2002 – has increased its deposits in Mexico to nearly $30 billion, making it the bank's ninth-largest market with operating costs of $1.8 billion.
“It has to do with the size of the consumer business in Mexico,” said one person familiar with the review. “You are trying to shrink the ranks of your retail business and focus on the core customer who also has a portfolio of wealth. In Mexico, HSBC does not have a competitive scale.
No decision has been made yet, but the withdrawal would be the latest sign of downsizing from the bank, which embarked on a global expansion spree in the early 2000s before refocusing on its core businesses in Hong Kong and the UK as well as its wealth offerings.
HSBC sold its Canadian business to Royal Bank of Canada for $10 billion two years ago, with similar exits from loss-making consumer operations in France and the United States.
The bank is not considering withdrawing from Mexico entirely, but will consider significantly reducing its retail presence as it struggles to compete with larger rivals such as BBVA and Citigroup's Banamex.
HSBC is also reviewing its position in countries such as Malaysia and Indonesia where executives believe it will also benefit better from focusing on flagship banking rather than mass market clients.
HSBC's new chief executive, George Al-Hadiri, who took office in September, is keen to focus on clients in the bank's “premium” segment as well as in wealth management, as he seeks to streamline the bank's operations and reduce costs, one of the people said. .
The bank's top executives are working toward a goal of generating up to $500 million in annual savings from job cuts that have already been announced, according to two people familiar with the matter, who cautioned that the number could change.
Among the recent departures is Nuno Matos, who ran HSBC's wealth and personal banking businesses, Annabelle RabieHead of Global Private Banking and Wealth Management at the bank, and Céline Hervier, Group Sustainability Officer.
Al Hudayri also consolidated cross-cutting senior roles in Commercial Banking and the Global Banking and Markets unit, as part of a wide-ranging overhaul of the bank's operations.
He is also working to abolish the title of “general manager,” a designation that grants higher status to some of the bank’s senior executives and brings better perks.
HSBC's main international rival, Citigroup, is in the process of exiting its Mexican consumer business, as it also steps back from an earlier era of global expansion.
HSBC declined to comment.
