HSBC to wind down retail banking in Bangladesh

HSBC will start winding down its retail banking operations in Bangladesh in the second half of this year, with the gradual process expected to take six to eight months.

The decision follows a review of its retail operations in the country and aligns with the global HSBC Group portfolio, HSBC Bangladesh said in a statement yesterday.

"As part of the exit plan, the bank will immediately stop onboarding new retail customers and will work to ensure a smooth transition for existing clients," said the multinational bank.

HSBC's Corporate and Institutional Banking (CIB) operations in Bangladesh will remain unchanged.

"The bank recognises the importance of Bangladesh to its corporate and institutional clients and continues to invest in the CIB business to drive two-way trade and investment flows," HSBC said.

The move is part of HSBC's global strategy, announced in October 2024, to streamline operations and focus on markets offering stronger growth prospects.

In December last year, Reuters, citing the Financial Times, reported that the London-based multinational was reviewing its retail banking operations outside the UK and Hong Kong. This review could lead to substantial downsizing in other countries.

The bank is looking outside its core markets to reduce consumer presence and focus on wealthier "premier" customers, the report said.

In a conference call yesterday, HSBC CEO Georges Elhedery said that the bank started reviews of its retail banking business in Australia, Indonesia and Sri Lanka, and will start winding down its Bangladesh retail business in the second half of this year, reports Reuters.

Insiders said the retail banking arm in Bangladesh had been profitable and showing growth. However, the closure forms part of a broader global reassessment. The process of shutting down local retail operations and facilitating customer exits may take six to eight months.

HSBC Bangladesh recorded a 9 percent year-on-year rise in profit to nearly Tk 1,100 crore in 2024.

Deposits at the foreign bank increased by 3 percent year on year to Tk 22,695 crore in the last financial year. However, loans dropped 18 percent to Tk 18,927 crore in 2024 compared to the previous year, according to its financial statements.

As a result of the retail exit, staff in the division may be affected, according to insiders. However, the bank will give priority to those employees when recruiting for corporate banking and other roles, provided their skills are a match.

Apart from Bangladesh, HSBC is also considering selling its retail bank in Australia, reports the Financial Review.

In February this year, the bank announced it had agreed to sell its retail operations in Bahrain to Bank of Bahrain and Kuwait, as part of its ongoing global restructuring, according to Reuters.

Yesterday, HSBC Holdings reported a sharper-than-expected fall in profit, driven by write-downs linked to a Chinese bank and property exposure in Hong Kong, even as it pressed on with its worldwide overhaul.

Its 26 percent slump in pretax profit in the first half showed the challenge ahead for CEO Georges Elhedery, as the Europe's largest bank racked up losses in China, where it has increasingly pinned its plans for growth in recent years after shrinking in Western markets.

The lender's corporate and institutional banking businesses were unaffected by these developments, he said.

The bank posted a profit of $15.8 billion for the first six months of the year, falling short of brokers' forecasts of $16.5 billion.

HSBC shares listed in London dropped 4.5 percent, mirroring earlier losses in Hong Kong trading.

HSBC opened its first office in Dhaka in 1996. In Bangladesh, it provides a range of financial services including global payments solutions, trade services, treasury, and custody and clearing.

WHAT CUSTOMERS NEED TO DO

In a notice to customers, HSBC said the wind-down of its retail banking operations in Bangladesh would take place over six to eight months in phases.

While the bank will honour all existing agreements, it has already stopped accepting new applications for accounts, loans, term deposits, debit cards, student files, and investment products such as Sanchayapatra and bonds, according to the notice. 

It suggested that its customers having Sanchayapatra to submit other bank account numbers to the respective branch of the HSBC, so that it can update the account details in the Government Bond Portal.

Foreign currency bondholders have been requested to contact their HSBC branches for the detailed bond transfer process.

Customers have been advised to begin transferring their accounts, loans and deposits to other banks as soon as possible, with HSBC waiving all related charges and pledging support throughout the process.

In case of home loans and personal loans, the bank advises its customers to transfer those to other banks within the next 90 days.

HSBC will provide its customers with full support by issuing the required documents and certificates for this transfer, it added.

The bank said it will stop all auto-renewals of local and foreign currency term deposits immediately.

The bank said all local and foreign currency term deposits maturing after November and December 2025, respectively, would be encashed early and credited to customer accounts at a pro-rata rate.

Debit cards will be deactivated following account closures, while travel quota endorsements and seals must be cancelled in person at branches.

Non-resident customers will have until December 2025 to move their accounts and bonds. The bank said it will allow non-residents to move their accounts and bonds to their preferred bank.

HSBC also asked salary account holders to contact their employers for transfers and assured student file holders of full documentation support at no extra cost.

Updates will be posted regularly on the bank's website, and major changes will be communicated via email or post.