HSBC said to mull exit from smaller markets
HSBC Holdings is considering pulling out of some of the smaller markets in which it operates — such as Bermuda — according to a report by Bloomberg News.
John Flint, chief executive officer of the global bank, and Mark Tucker, the chairman, are considering shrinking the bank’s global imprint as part of a plan set to be revealed over coming months, Bloomberg reported, citing people with knowledge of the plans.
Bloomberg states: “Flint, who took over in February, is reviewing as many as a quarter of the 67 countries the bank operates in, and is mulling an exit or sale from smaller consumer operations such as Bermuda, Malta and Uruguay, said the people, who asked not to be identified because the strategy isn’t finalised.”
Bloomberg adds: “While the countries under review may be profitable, the duo want to sharpen the focus on the trade corridor that runs from Asia, through the Middle East and Europe, to North and Central America, the people said. With investors increasingly questioning subpar returns, HSBC needs to eliminate more peripheral operations where there’s little rationale for running a costly full-service bank, especially on the retail side, according to the people.”
HSBC bought the Bank of Bermuda in 2004 and has operated on the island ever since.
The bank sold its Bermudian private banking and trust businesses to Butterfield in 2015, but kept the investment, retail and commercial banking operations.
In 2017, HSBC Bermuda reported net income of $162 million — a 38 per cent increase in profit over 2016 — as revenue rose 3 per cent.
In an interview with The Royal Gazette last month, after the results were announced, Mark Watkinson, HSBC Bermuda’s CEO, said the bank was performing well and returning value to shareholders. He added: “For us, Bermuda is a good market.”
A spokesperson from HSBC Bermuda said: “We don’t comment on rumours or speculation.”
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