HSBC will stop selling new investment products, including mutual funds, from March 8, and it will end operations in its branches in Tokyo, Osaka and Nagoya by July 31, the London-based bank said in the memo e-mailed to its customers yesterday and obtained by Bloomberg News. A spokesman in London confirmed the details of the e-mail.
The U.K. lender is scaling back in parts of Asia, including Japan, South Korea and Thailand, as Chief Executive Officer Stuart Gulliver cuts costs and prepares for tighter capital rules. HSBC last month agreed to sell operations in Costa Rica, El Salvador and Honduras to Colombia’s Banco Davivienda SA for $801 million to focus on bigger markets in Latin America.
“I am writing to you today to inform you with regret that we will be discontinuing our HSBC Premier service in Japan,” Gifford Nakajima, head of retail banking and wealth management, Japan HSBC Premier, said in the memo. “This follows a global strategic review of our business, and means that we will be undertaking a phased withdrawal of our HSBC Premier service, in line with existing contractual obligations.”
Seeking Buyers
The bank was seeking buyers for the Premier unit, which targets wealthy individuals in Japan, three people familiar with the matter said on Jan. 25. The London-based bank started an auction, with the option of shutting the division if offers weren’t attractive enough, two of the people said. HSBC Premier was started in 2008.
HSBC opened its first Japanese branch in the port city of Yokohama in 1866. It started services for “mass-affluent” customers, people with savings of at least 10 million yen ($125,000), in Tokyo in 2008.
The company in 2010 added retail offices in Osaka and Nagoya, the second- and third-largest metropolitan areas, bringing the total to six. HSBC’s three Tokyo branches are in the Marunouchi financial district, as well as Hiroo and Akasaka.
HSBC and lenders including Citigroup Inc. (C) and Standard Chartered Plc have been competing with Japanese banks for a share of household financial assets that totaled 1,471 trillion yen as of Sept. 30, according to central bank figures.
HSBC retains securities and asset management operations in Japan. The lender in December agreed to sell its Japanese private banking business to Credit Suisse Group AG. The sale of the unit, which managed assets of $2.7 billion as of Oct. 31, is expected to be completed in the second quarter of 2012, HSBC said in a statement in December, without disclosing the price.
(Bloombergnews)