HSBC backs out of U.S. retail banking

  • You may be getting a new bank account if you're still a customer at HSBC (NYSE: HSBC ). The company is ending its mass-market retail banking business in the U.S., selling much of the operations to Citizens Bank (NYSE:CFG) and Cathay Bank (NASDAQ:CATY), as it pivots towards wealth management and international banking. The change of strategy means HSBC will go from 1.4M customers to about 300K, after expanding into U.S. retail banking in the 1980s to diversify its geographical focus.
  • Details: The bank will offload 90 of its 148 American branches and wind down another 35 to 40 locations. Two dozen other sites will be converted into international wealth centers that will only service high-net-worth clients with balances over $75,000. HSBC will also sever ties with its retail business customers, meaning it will no longer transact with small businesses that have a turnover of $5M or less.
  • "They are good businesses, but we lacked the scale to compete," CEO Noel Quinn declared. "Our continued presence in the U.S. is key to our international network and an important contributor to our growth plans." The lender lost nearly $550M on its U.S. wealth and personal banking division in 2020, compared to a profit of $573M on its global banking and markets division.

    Over the current book year the company from London's total revenue could be around 50.39 billion GBp (consensus estimates). This is rather significant lower than 2020's revenue of 67.85 billion GBp.

    Historical revenues and results HSBC plus estimates 2020

    fundamantele data

    The analysts expect for 2021 a net profit of 10.95 billion GBp. For this year most of the analysts expect a profit per share of 54 GBp. The PE-ratio therefore is 8.26.

    Huge dividend HSBC

    Per share the analysts expect a dividend of 23 GBp per share. The dividend yield is then 5.15 percent. The average dividend yield of the banks equals a relatively high 2.91 percent.

    Most recent target prices around 468 GBp

    The most recent recommendations for the bank are from Citigroup , Berenberg and Barclays .

    Based on the current number of shares HSBC 's market capitalization equals 9065.8 billion GBp. The HSBC stock was the past 12 months quite volatile. Since last June the stock is 19 percent higher. This year the stock price moved between 282 and 463 GBp.

    Historical stock prices HSBC

    equity research hsbc

    At 13.40 the stock trades 0.84 percent higher at 446.3 GBp.

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