HSBC May Quit Smaller Markets, CFO Says

HSBC is reviewing a possible exit from as many as a dozen countries, or one in five of the markets it operates in, to sharpen its focus on Asian expansion, Chief Financial Officer Georges Elhedery told Reuters in his first interview since taking the role.

The reviews follow pressure from shareholder Ping An Insurance, which wants HSBC to prioritise growth in Asia, where the British bank generates 78 percent of its total profit.

"Some of these will have slower progress than others, and none of them is material enough on its own to change the profile of the overall business, but as we progress through and execute on these assessments, we do expect them to contribute towards that shift to Asia," Elhedery said, declining to disclose which markets were under review or the time frame.

HSBC's ongoing pivot to Asia has already triggered planned sales of all or parts of its businesses in France, Greece, Russia and Canada, announced in the last two years.

HSBC does not break out all of its individual country performances, making identifying underperforming markets tough. But its Europe and Latin American operations may be under the microscope, with the former recording a net loss in 2022.

Latin America contributed just under 5 percent of group profit.

One country not currently under review is Mexico, Elhedery said, despite debate among analysts and investors on the bank's future presence in the country.

"Mexico is performing very well for us," the veteran banker said, pointing to the US-Mexico-Canada trade deal, which have supported its growth.

"Some 70 percent of client acquisition in the retail business is through employees of the multinational companies that HSBC banks in Mexico, so there are strong synergies with the wholesale business and the package as a whole makes sense for us."

HSBC's shares have risen 16.5 percent this year, as higher interest rates lifted its income and it began to restore share buybacks and dividend payments curbed during the Covid-19 pandemic.

A spokesperson for Ping An said it had no further comment. (Reuters)