HSBC opens in Apple’s hometown, plans 50 new US branches
US division plans expansion of bank network as it opens in Cupertino, California
Bengaluru — The US arm of HSBC Holdings announced plans on Monday to expand its branch network by about 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 US at a time when many lenders are retrenching.
HSBC, which makes more than 80% of its profit in Asia, in May announced plans to boost its Asia retail wealth management staff by about 300 by the end of 2019.
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 2007-2008 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 its profit for the first half of 2018 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 has more than 220 US locations, spread across 10 states on the east and west coasts.
About 40% 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% at 651p.