HSBC, one of the world’s largest banking organisations, is undertaking a strategic review of its retail banking operations outside its core markets of the UK and Hong Kong, potentially leading to significant scaling back in several countries, including Mexico.
The banking giant is scrutinising locations where it could reduce its consumer presence to concentrate on more affluent ‘premier’ clients. Mexico, where HSBC has maintained operations for over two decades, stands as a prime candidate for this restructuring. The bank’s history in Mexico has been complex, marked notably by a £2 billion fine from US authorities in 2012 over anti-money laundering failures involving drug cartels.
Despite these past challenges, HSBC has built substantial operations in Mexico since acquiring Grupo Financiero Bital in 2002, accumulating nearly £30 billion in deposits. This makes Mexico HSBC’s ninth-largest market, though operating costs remain high at £1.8 billion annually.
The bank’s new chief executive, Georges Elhedery, who assumed leadership in September, is spearheading this strategic shift. His vision centres on streamlining operations and reducing costs while emphasising premier banking and wealth management services. The restructuring aims to achieve annual savings of up to £500 million through previously announced job cuts.
This strategic review extends beyond Mexico to other markets including Malaysia and Indonesia, where the bank believes a focus on premier banking could yield better returns than mass-market services. The move aligns with HSBC’s recent pattern of consolidation, following its £10 billion sale of Canadian operations to Royal Bank of Canada and exits from consumer operations in France and the US.
The restructuring reflects a broader industry trend, with rival Citigroup also retreating from its Mexican consumer business, marking the end of an era of global banking expansion.
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