The China Banking Regulatory Commission publicly announced the approval of the closure of HSBC (China) Co., Ltd. Maoming Branch. At the same time, it also approved the closure of Citibank (China) Co., Ltd. Chengdu Fengde International Plaza Branch on June 13. This is the third branch to receive regulatory approval to close this month after Citibank (China) closed its Futian Branch in Shenzhen and Huanglong Branch in Hangzhou.
On June 18, Citibank (China) and HSBC (China), two foreign banks, were approved to close their branches.
The China Banking and Insurance Regulatory Commission announced that it agreed to the closure of the Maoming branch of HSBC (China) and the Chengdu Fengde International Plaza branch of Citibank (China) and the cancellation of their financial licenses on June 13. This is the third branch approved by regulatory authorities to close this month, following the closure of Citibank (China)'s Futian branch and Huanglong branch in Hangzhou.
Although there are similarities in branch closures, the reasons behind the closures of the two institutions are not the same. In the eyes of industry insiders, Citibank (China) is closing branches to transfer personal banking wealth management business to other areas, while HSBC (China) is primarily focused on operating costs.
Citibank China has temporarily suspended its branches for personal banking business.
According to the official website of Citibank (China), Citibank (China) announced in May this year that due to the transfer of personal banking wealth management business, 15 branches with personal banking business are expected to cease operations from June 8, 2024. The Fangde International Plaza branch in Chengdu, the Futian branch in Shenzhen, and the Huanglong branch in Hangzhou are among these branches.
After Citibank (China) closes its personal banking business branches, personal customers and their accounts remaining in various places will be centralized and managed by Citibank Shanghai Branch. Individual customers who remain will still be able to request redemption, remittance, and account closure by calling the bank's customer service hotline, sending emails, and other means of communication.
Since Citibank (China) announced plans to gradually close its personal banking business in mainland China in 2022, Citibank (China) has reached an agreement with Fubon Hua Yi Bank to transfer Citibank China's unsecured personal loans, debt claims, and related ancillary rights and interests. Delivery is set for early July.
Recently, Citibank (China) has sold and transferred its personal wealth management business in mainland China to HSBC (China). HSBC (China) has taken over Citibank (China)'s personal wealth management clients and related assets in 11 major cities across the country. Over 300 Citibank (China) employees have officially joined HSBC.
Citibank (China) also made it clear that its business with corporate and institutional clients in mainland China is not affected by the relevant transactions.
Industry insiders: Branch closures are not surprising, but are based on considerations such as costs and digitalization.
Why did HSBC (China), which has just taken over Citibank (China)'s personal wealth management business in mainland China, close its Maoming branch?
An analyst told Caixin: "Like their domestic counterparts, foreign banks are also facing cost pressures. Adjusting the layout of their business branches to reduce operating costs is a measure to cope with market challenges and improve efficiency. In addition, the digitalization level of foreign banks has also continued to improve, and user habits have changed. Customers can experience banking services through more convenient and efficient online channels, reducing dependence on physical branches. Therefore, closure is also a normal adjustment."
What needs to be seen is that HSBC (China) is investing heavily in talent strategy. Caixin reporters learned from HSBC (China) that by the end of 2024, the total number of employees under its "Big Wealth Management" matrix will reach about 6,000. In the first quarter of 2024, the group's net value of new investment assets in the Asian market increased by 33% year-on-year to US$19 billion, of which the net value of new investment assets in mainland China almost doubled year-on-year.
HSBC China's CEO and Executive Director, Wang Yunfeng, recently stated: "HSBC is firmly bullish on the development potential of the Chinese market and continues to increase investment for the long term. In recent years, the group has invested several billion yuan in the domestic market, much of which focuses on the high-growth wealth management sector. After this acquisition is completed, we can further consolidate our competitive advantage in the wealth management sector for foreign banks while continuing to fully play our strengths in cross-border financial services and support customers at home and abroad to seize the opportunities of deep integration of China and the world economy."