According to a Wall Street Journal report, HSBC has announced the dissolution of its small business banking division in the U.S., notifying approximately 4,400 corporate clients with annual revenues below $50 million that they will gradually transition to other financial service providers. This move highlights the bank's strategy to concentrate on core markets and adjust its business structure.

A HSBC spokesperson noted that around 40 employees from this division have been laid off this week, and the bank will assist customers in finding suitable banking partners during the transition period. The bank will still retain some small business clients, but their management will be reassigned to other teams. Most of the affected clients are domestic American companies rather than subsidiaries of multinational corporations.

Since Georges Elhedery took over as CEO last fall, he has been pushing for a business overhaul aimed at improving profitability and sharpening the focus on areas where the bank has a competitive advantage. HSBC’s headquarters in London is the largest bank in Europe by assets and has played a critical role in global trade finance and cross-border settlement.

Prior to Elhedery's appointment, HSBC had already begun exiting certain markets to streamline its operations. In recent years, the bank has maintained a focus on the Hong Kong and UK markets while increasing its investments in Asia. The recent decision to withdraw from the U.S. commercial banking sector aligns with earlier announcements to end its advisory services for corporate mergers and offerings in the U.S. and Europe. HSBC had already sold its U.S. retail banking business to Citizens Bank and Cathay Bank back in 2021 and its Canadian operation to Royal Bank of Canada in 2022. Currently, the North American market represents only 3% of HSBC's pre-tax profits for 2024, down from 6% five years ago, with the number of employees also dropping from nearly 17,000 to less than 7,000.

While other European banks, like BNP Paribas, have also exited the competitive U.S. retail banking market, HSBC continues to expand in certain areas within the U.S. Following the acquisition of Silicon Valley Bank's UK subsidiary in 2023, the bank has actively expanded its financial services for startups, covering regions like Boston, New York, and San Francisco. It has also preserved its private banking division and wholesale banking services for large enterprises in the U.S.