HSBC to Exit Consumer Finance Business in Canada
TORONTO, March 21, 2012 /CNW/ - HSBC Financial Corporation Limited today announced that it is winding down its consumer finance business ("the Business"). The decision was made following a comprehensive review and assessment where it was determined that the consumer finance business no longer supports HSBC's core businesses and growth strategy in Canada.
HSBC Financial Corporation Limited is the legacy business of Household International acquired by HSBC in 2003 and already wound down in the US and the UK. In Canada it has operated under the separate brand of 'HSBC Finance' on a stand-alone basis from HSBC Bank Canada branches.
Lindsay Gordon, Chairman, HSBC Financial Corporation Limited, and President and Chief Executive Officer, HSBC Bank Canada, said: "This move, while not taken lightly, will allow HSBC to better focus our resources on the core businesses that matter most to our Canadian banking customers. Canada is a key global market for HSBC. Building on the solid base we have built over the last 30 years, we are continuing to make significant investments to grow HSBC Bank Canada's core businesses in Commercial Banking, Global Banking and Markets, and Retail Banking and Wealth Management."
HSBC Financial Corporation Limited consumer finance offices will cease taking loan applications and will be closed as soon as practical. Every effort is being made to ensure the transition is as seamless as possible for customers.
The Business will continue to service and collect its existing receivable loans and to provide customers with call centre support. HSBC Retail Services Inc. will provide notice to merchants and will continue to operate its private label credit card programs until the end of the notice periods.
The HSBC Bank Canada MasterCard business will not be impacted, and will remain a key part of HSBC Bank Canada's offering to retail and commercial banking customers.
This closure will impact HSBC Finance's offices and HSBC Retail Services Inc. Initially, approximately 500 employees at 75 offices across Canada will be impacted. HSBC is committed to providing post-employment assistance and treating employees with respect and fairness throughout the transition.
Lindsay Gordon continued: "Our first preference was to sell the consumer finance business. Despite concerted efforts, a suitable buyer could not be found. Having exhausted all available alternatives, the appropriate steps are now being taken to wind down the Business. The decision will have no impact on HSBC's banking operations in Canada."
There will be no impact on the medium-term notes of HSBC Financial Corporation Limited which will be paid on their scheduled maturity in May 2012.
HSBC Financial Corporation Limited is a subsidiary of HSBC Bank Canada. HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in Canada. With around 7,200 offices in over 80 countries and territories and assets of US$2,556bn at 31 December 2011, the HSBC Group is one of the world's largest banking and financial services organizations.
Ernest Yee (604) 641-2973
Sharon Wilks (416) 868-3878