HSBC plans to sell just under half of its retail banking branches in the U.S. to First Niagara Bank for an estimated $1 billion. Most of the 195 branches to be sold are in upstate New York, while six are in Connecticut.
British-based HSBC owns more than 470 bank branches in the U.S. The sale is part of new CEO Stuart Gulliver's strategy to reduce retail operations in some parts of the world while focusing on fast-growing markets in Mexico and Turkey, according to Bloomberg. The sale will be carried out through HSBC's wholly owned subsidiary HSBC Bank USA.
The bank continues to deal with the impact of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. That deal made HSBC the biggest subprime lender in the U.S. at the time, which resulted in billions of losses to HSBC.
HSBC Holdings Plc, Europe’s largest bank, was expected to post a gain in first-half net income as shrinking U.S. charge-offs outweigh a decline in investment banking revenue. The bank may report net income of $8 billion for the first six months of 2011, according to the median estimate of four analysts surveyed by Bloomberg.
