An IMGW News Report
HSBC is conducting a review of its retail banking operations outside the UK and Hong Kong, potentially scaling back in countries such as Mexico as it seeks to cut costs and streamline its global operations. The bank aims to reduce its consumer footprint in markets where it lacks competitive scale, focusing instead on wealthier ‘premier’ clients, according to sources familiar with the matter.
Mexico, where HSBC entered over two decades ago, is among the key markets under review. The bank’s history in the country has been challenging, including a $2bn fine in 2012 by US authorities over failures that enabled drug cartels to launder substantial sums. Despite these setbacks, HSBC has grown its deposits in Mexico to nearly $30bn, making it the bank’s ninth-largest market with operating costs of $1.8bn. However, insiders suggest that HSBC’s retail operations in Mexico lack the scale needed to compete effectively against larger rivals like BBVA and Citigroup’s Banamex.
Meanwhile, HSBC’s review of its retail banking operations outside its core UK and Hong Kong markets has been confirmed by Financial Times reports and Reuters sources. The bank’s strategy involves pivoting towards its ‘premier’ wealth banking brand, which was relaunched in Britain last month to attract affluent clients. HSBC UK’s head of wealth and personal banking, José Carvalho, highlighted this move as a critical component of the bank’s broader plan to focus on wealthier customers.
Last week, the bank announced several senior management changes as its new CEO Georges Elhedery aims to streamline costs and improve decision-making. Elhedery, who took over in September, is prioritising high-net-worth clients and wealth management as part of a wide-ranging restructuring effort. This includes reviewing HSBC’s positions in other markets such as Malaysia and Indonesia, where a focus on premier banking could offer better returns.
These developments follow HSBC’s recent exits from lossmaking consumer operations in France, the US, and Canada. While no final decisions have been made regarding Mexico, HSBC is expected to significantly reduce its retail presence in regions where it has struggled to compete.
HSBC declined to comment on the ongoing reviews. Its international rival Citigroup is similarly exiting its Mexican consumer business as part of a broader global retrenchment strategy.
