HSBC Holdings PLC, one of the world’s largest banks, said it would pour about $6 billion of extra investment into Asia in the next five years, and could sell its unprofitable U.S. retail operations, as it doubles down on its core business.
The London-based lender, which makes most of its profit in Hong Kong and mainland China, is already one year into a major overhaul. But it said it had tweaked its strategy as the pandemic had driven a surge in digital banking, sustainability had grown in importance, and as interest rates were likely to be “lower for longer.”
The bank said Tuesday that earnings fell 35% to $3.9 billion last year as the coronavirus pandemic roiled the global economy. HSBC set aside $8.82 billion in provisions for bad loans last year versus less than $3 billion in 2019.
Chief Executive Noel Quinn is leading the reorganization, though geopolitical tension has strained his ambition for the bank to be a financial bridge between China and the rest of the world. HSBC last year supported China’s imposition of a national security law in Hong Kong, which the U.S. and British governments opposed.
“We plan to focus on and invest in the areas in which we are strongest,” Mr. Quinn said. As part of that, the bank wants to be a market leader in serving rich Asian customers. Other areas that HSBC consider core include retail banking in Hong Kong and Britain, cross-border trade, and facilitating trade and capital flows into and across Asia.