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HSBC opens in Apple's home town, plans 50 new US branches

HSBC opens in Apple's home town, plans 50 new US branches

FILE PHOTO: The HSBC bank is seen in the financial district of Canary Wharf in London, Britain, July 13, 2017. REUTERS/Kevin Coombs/File Photo

CALIFORNIA: The US arm of HSBC Holdings announced plans on Monday (Jun 17) to expand its branch network by around a quarter as it opened a new location in Apple's home town of Cupertino, California.

The move by Europe's biggest lender by assets comes as it plans a broader strategic shift to try to improve performance in the United States at a time when many lenders are retrenching.

HSBC, which makes more than 80 per cent of its profit in Asia, last month announced plans to boost its Asia retail wealth management staff by about 300 by end of this year.

HSBC Bank USA said it would hire more than 300 employees as part of the expansion of its national retail branch network that would add up to 50 branches in new and existing markets.

"HSBC is optimising its existing network to right-size and grow its business as well as expand its footprint into new and existing markets that provide attractive opportunities to grow its customer base," the London-based bank said.

HSBC has been trying to turn around its US business that has underperformed for years. Part of the plan included a push into the US credit card and personal loans markets, where it faces a battle against heavily entrenched domestic competition.

Its US underperformance is partly a legacy of a disastrous foray into subprime lending in the country when it bought consumer lender Household in 2003.

That meant the bank was heavily exposed to the imploding US subprime mortgage market as the 2007-8 crisis hit, costing it billions of dollars in writedowns and lawsuits and dampening its appetite in the world's biggest economy for a decade.

A settlement with US regulators wiped out almost all of the its profit for the first half of last year in North America, where it is trying to turn around its business.

In May, the bank said the turnaround strategy for its US business was progressing, but the task remained its "most challenging strategic priority".

The company's website says it currently more than 220 US locations, spread across 10 states on the east and west Coasts.

About 40 per cent of the planned new branches would be in low-to-moderate income communities, the bank said, adding that it expected to start openings from the summer.

Shares of the company were up 0.8 per cent at 651 pence.

Source: Reuters/na

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