HSBC CEO Says U.S. Credit Card Business No Longer Makes Strategic Sense
The CEO of HSBC, Stuart Gulliver, announced recently that while he’s pleased with the state of the U.S. economy, he feels keeping the card business in the country does not make strategic sense. As a result, he is hinting at the possibility of phasing out the company’s credit card business in the United States.
HSBC Looking for a Buyer
While attending a World Economic Forum event in Jakarta, Gulliver told reporters on the sidelines that he was considering a departure from the U.S. card market. He stated, “If we can’t find a buyer we will put it into rundown.”
HSBC is currently Europe’s largest bank. Last month, it said it planned to slash up to $3.5 billion in costs and cut back in retail banking in order to lift its return on equity.
Gulliver Wants to Change the Shape of the Business
The bank noted its decision to consider dropping the U.S. card business has a lot to do with the fact that the U.S. customer base is not linked to the rest of its retail banking group.
Gulliver stated the relationship of U.S. cardholders is often with a store rather than the bank itself. In other words, the bank could not cross-sell as it could in other retail banking markets as is the focus in the United Kingdom, Hong Kong and emerging markets in Indonesia.
Ultimately, Gulliver says the company needs to change the shape of the business.
While he says the U.S. card business could indeed land on the chopping block, currently, the company is just reviewing the state of the business to decide which route to take.