HSBC to sap US credit card business if no buyer found
Updated: 2011-06-14 07:02
(HK Edition)
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HSBC will run down its $33 billion US credit card business if it cannot find a buyer, the bank's chief executive said on Monday, part of efforts to slash costs and cut back on retail banking.
CEO Stuart Gulliver said he was upbeat in the medium term about the economic outlook on the economy in the United States but that the card business there did not make strategic sense.
"If we can't find a buyer we will put it into rundown," Gulliver told reporters on the sidelines of a World Economic Forum event in Jakarta, adding that the review of the card business was still ongoing.
Europe's largest bank said last month it aimed to slash up to $3.5 billion in costs and cut back its retail banking, in order to lift its return on equity. As part of this it is deciding whether to keep its US card business, where its customer base is not linked to the rest of the group.
Gulliver said the relationship of US card holders was often with a store rather than the bank itself. That meant the bank could not cross-sell as it could in other retail banking markets which it is still focusing on, including the UK, Hong Kong and emerging markets such as Indonesia.
"We need to change the shape of our business," Gulliver said.
The CEO also told reporters that HSBC will remain "completely competitive" in Asia and will achieve its cost cuts from areas other than staff reductions in the region.
Separately, Peter Wong, HSBC's chief executive officer for the Asia-Pacific region, also told reporters in Jakarta that the lender is "100 percent" ready for a listing in Shanghai.
The lender, whose shares are traded in Hong Kong and London now, has previously said it hopes to be the first international company to list on the international board on the Shanghai Stock Exchange and will use all the funds it raises from the international board to support its business development on the mainland.
The four key conditions for the launch of the international board have "basically" been met, Tu Guangshao, vice mayor of Shanghai, said last week, signaling the imminent launch of a platform for trading of shares in overseas companies.
Reuters - Bloomberg
(HK Edition 06/14/2011 page2)