HSBC to Exit US Business Banking Unit to Streamline Operations

After shutting its retail banking business in the United States in 2021, HSBC Holdings PLC HSBC is now set to close its business banking division in the country. This announcement comes amid the company’s ongoing business simplification efforts and accelerated shift toward the Asia and Middle East regions. This was first reported by Reuters.“Following a strategic review of our business, we have decided to exit our Business Banking portfolio in the United States,” HSBC reported in a statement to Reuters. This move will likely affect nearly 4,500 HSBC clients. The bank will be aiding the impacted clients in transitioning to a suitable alternative provider and will continue to serve some clients in Mid-Market and Global Network Banking Business.The move aligns with the bank’s ongoing overhaul of its dealmaking and corporate advisory activities in the West. HSBC intends to tighten its focus on Asia and boost returns under CEO Georges Elhedery.HSBC’s Other Restructuring EffortsElhedery, who succeeded Noel Quinn as CEO last September, is leading a major restructuring initiative that splits the bank into "eastern" and "western" units. As part of the overhaul, HSBC merged its commercial banking division with its global banking and markets unit, which includes investment banking (IB).This initiative aims to mitigate costs by reducing the bank’s expensive layer of senior staff. Last month, Reuters reported that HSBC intends to reduce its workforce in France by about 10%. In January, the bank reported its plans to close its mergers and acquisitions (M&A) and some equities businesses in the U.K., Europe, and the Americas. Also, HSBC closed its payments app Zing, just a year after it launched the digital challenger.Further, in March, the company announced the sale of its private client trust business – HSBC Trust Company (UK) Limited – to Ludlow Trust. In February, the bank agreed to sell its retail banking business in Bahrain.It is also progressing with divestments in Germany, South Africa, and France, and has begun a strategic review of its business in Malta.Also, in October 2024, the company announced an initiative to simplify its organizational structure and operate through four distinct lines of business – Hong Kong, UK, Corporate & Institutional Banking, and International Wealth & Premier Banking. The company announced the appointment of leadership teams across the segments in December 2024.HSBC Price Performance & Zacks RankShares of HSBC have gained 24.9% in the past six months compared with the industry’s growth of 22.1%.Image Source: Zacks Investment ResearchCurrently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Similarly, a few other European banks have been focusing on streamlining their global operations. Last month, UBS Group AG UBS agreed to sell O’Connor single-manager hedge fund, private credit and commodities platform to Cantor Fitzgerald. Further, UBS launched a transformation plan in December 2024 to transform its wealth management business in the United States into six divisions and focus more on affluent clients below the ultra-wealthy level.Also, this March, the Economic Times reported that Deutsche Bank DB aims to reduce branches by a significant number and trim the headcount of the retail bank by roughly 2,000 people in 2025. Also, Deutsche Bank has been restructuring its IB operations since 2019 to establish itself among the top five banks in the United States.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Deutsche Bank Aktiengesellschaft (DB): Free Stock Analysis Report UBS Group AG (UBS): Free Stock Analysis Report HSBC Holdings plc (HSBC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks