Over the weekend, the Financial Times reported that HSBC Holdings (HSBC Quick QuoteHSBC - Free Report) is considering a full exit from its U.S. retail banking operation. This is one of the options being considered to improve performance at the North America business.

Other options include scaling back investment banking operations in the country to concentrate on international clients with focus on Asia and Middle East.

Citing persons familiar with the matter, the report states that senior management personnel intends to outline the plan in the coming weeks. It is to be noted that outright exit from the United States is not in the cards.

Performance at North America business has been disappointing over the past years. During the first three quarters of 2020, it reported pre-tax profits of $16 million. Also, in 2019 and 2018, the division earned pre-tax profits of $767 million and $799 million, respectively.

Further, at the end of third-quarter 2020, HSBC had shuttered 80 U.S. retail branches and now has roughly 150 branches in the East and West coasts of the country.

The above mentioned initiative is part of HSBC’s bigger plan, under which it intends to lower annual costs to below $31 billion by 2022. The target is well below $42.3 billion expenses incurred in 2019.

HSBC along with several other banks like Deutsche Bank (DB Quick QuoteDB - Free Report) , Goldman Sachs (GS Quick QuoteGS - Free Report) , Wells Fargo and Lloyds Banking Group (LYG Quick QuoteLYG - Free Report) have been undertaking efforts to streamline business. Banks across the world are facing economic slowdown caused by the coronavirus pandemic and low interest rates. Thus, with an aim to improve operating efficiency and focus on core business, several banks are taking initiatives to support financials.

Shares of HSBC have rallied 24.3% over the past three months, outperforming the industry’s growth of 20.5%.



Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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