According to a report from The Wall Street Journal, HSBC has recently announced the dissolution of its U.S. small business banking division, notifying approximately 4,400 corporate clients with annual revenues below $50 million that they will be gradually transitioned to other financial service providers. This move underscores the bank's strategic focus on core markets and business restructuring.

A spokesperson for HSBC stated that around 40 employees in this division have been laid off this week, and assistance is being provided to help clients find suitable banking partners during the transition period. While the bank will retain some small business clients, they will be managed by other teams. Most of the affected clients are domestic U.S. companies rather than subsidiaries of multinational corporations.

Since taking over last autumn, HSBC CEO Georges Elhedery has been pushing for business restructuring aimed at enhancing profitability and focusing on areas where the bank has competitive advantages. He indicated this would mean reducing duplicate positions and concentrating resources on the most competitive markets and product lines.

HSBC, headquartered in London, has long played a crucial role in global trade financing and cross-border settlements. However, even before Elhedery's appointment, the bank had begun withdrawing from certain markets to streamline operations. In recent years, HSBC has been increasingly focusing on the Hong Kong and UK markets, while ramping up investments in the Asia region.

This week's announcement to exit U.S. commercial banking reflects the earlier decision to end advisory services for corporate mergers and acquisitions and IPOs in the U.S. and Europe. In fact, HSBC already sold its U.S. retail banking operations to Citizens Bank and Cathay Bank in 2021 and offloaded its Canadian business to the Royal Bank of Canada in 2022. Currently, North America accounts for only 3% of HSBC's pre-tax profit for 2024, a significant decline from 6% five years ago, while the number of employees has reduced from nearly 17,000 to fewer than 7,000.

Other European banks, such as BNP Paribas, have also been exiting the competitive U.S. retail banking market in recent years. However, HSBC continues to expand in certain areas of the U.S. Following its acquisition of the U.K. subsidiary of Silicon Valley Bank in 2023, HSBC has been actively leveraging that platform to expand financial services for startups, reaching areas like Boston, New York, and San Francisco.

Additionally, HSBC retains its private banking and wholesale banking services for large corporate clients in the U.S.