HSBC Holdings PLC (GB:HSBA) is reportedly considering pulling back its retail banking operations outside its core regions, UK and Hong Kong. According to the Financial Times, HSBC is reviewing its global strategy to scale back its consumer operations and concentrate on serving wealthier clients, aiming to reduce costs. However, HSBC refused to provide any official comment on the news.
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HSBC Holdings is a global bank that serves approximately 42 million customers globally. The bank operates in over 60 countries worldwide. Year-to-date, HSBC shares have gained 20%.
HSBC Eyes Retail Banking Overhaul
The Financial Times further reported that one of the markets under evaluation is Mexico, where HSBC has operated for over two decades. Sources revealed that HSBC’s retail operations in Mexico don’t have any competitive advantage. As a result, the bank aims to focus on wealthier clients who can also bring in investment business. Additionally, the bank is evaluating its operations in countries like Malaysia and Indonesia, where focusing on premier banking could offer significant advantages.
If finalized, this would mark another step for HSBC in shifting away from global expansion. In the early 2000s, the bank expanded worldwide but later decided to focus on key areas like Hong Kong, the UK, and wealth management.
Last month, Reuters reported that HSBC is planning to exit its credit card business in China due to profitability issues. The bank has stopped issuing new cards in China and is gradually winding down the service for most of its existing customers. However, it plans to continue providing services to its premier clients.
Is HSBC a Good Stock to Buy?
Yesterday, analyst Andrew Coombs from Citi reiterated a Buy rating on the stock, predicting an upside of 17%.
Overall, HSBA stock has received a Moderate Buy consensus rating on TipRanks based on a total of eight recommendations. It includes three Buy and five Hold ratings from analysts. The HSBC share price target is 760.12p, which is almost similar to the current trading level.
