HSBC could quit small, non-strategic countries including New Zealand, the Financial Times suggests. HSBC NZ says business constantly reviewed but Asia will continue to be a core engine for business growth

HSBC's plans to deepen the biggest restructuring in its 155-year history could see it sell or close its operations in small, non-strategic countries including New Zealand, the Financial Times reports.

According to the FT, HSBC's board has decided the COVID-19 crisis requires drastic measures. Asked for comment an HSBC New Zealand spokesman told interest.co.nz: “We constantly review our business operations. The Group’s new strategic focus will see Asia continue to be a core engine for business growth over the next few years.”

In February HSBC said it would cut 35,000 jobs, US$4.5 billion in costs and US$100 billion of risk-weighted assets by shrinking its US and European businesses and investment bank. Citing people familiar with the bank's discussions, the FT says HSBC plans to redirect resources to Asia, the bank's historical heartland and profit centre. The COVID-19 pandemic saw HSBC pause lay-offs. However according to the FT, the board is now pressing executives to restart the restructuring and come up with even more radical changes. These potentially include further cuts or even a sale of its US business alongside its French retail network and operations in smaller non-strategic countries, the FT says.

"Some of the more marginal businesses that were previously given the benefit of the doubt are being re-examined, say senior figures at the bank," the FT says.

"Executives are also revisiting a long list of small, non-strategic countries including Malta, Bermuda, the Philippines and New Zealand to see if any of those divisions can be sold or closed. Previous efforts to sell were hampered by a lack of buyers acceptable to local regulators, one of the people said."  

HSBC operates in New Zealand as a branch of the Hongkong and Shanghai Banking Corporation Ltd of Hong Kong. As of December 31 HSBC NZ had total assets of $6.64 billion and gross loans of $4.66 billion. In 2019 the bank made net profit after tax of $40.2 million.

In 2012 the FT reported HSBC was considering selling or closing its operations in several countries including New Zealand. HSBC strongly denied this at the time and has remained in New Zealand since.

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