HSBC to close 114 branches in Britain from April
30th November 2022 12:16
by Victoria Scholar from interactive investor
The banking giant says that 95% of all transactions take place online and the number of people visiting branches has slumped over five years.
HSBC is closing 114 branches in Britain from April 2023. According to HSBC (LSE:HSBA), the number of people visiting branches has slumped by 65% over five years.
The pandemic expedited the shift towards online banking when lockdowns and government restrictions meant that branches were forced to close, prompting customers to switch to online banking whether they liked it or not. HSBC said 97.5% of all its transactions now take place online.
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Today’s decision is part of HSBC’s strategic move towards digital banking and serves as a way for the lender to cut costs by reducing its number of bricks and mortar physical stores.
High streets across Britain have been facing a deepening crisis in recent years with footfall on the slide amid the rapid expansion of online shopping with banking services just one piece of this broader puzzle. Banking apps and websites have become increasingly user friendly with more and more services on offer, resulting in a sharp decline in the requirement for branches. However, this could unfairly impact certain pockets of society such as those without internet access or the elderly who can sometimes struggle with technology.
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Shares in HSBC are very modestly lower but have outperformed the broader market so far this year, rallying 8% since the start of January versus the FTSE 100, which is flat year-to-date. The rising interest rate environment has helped to support returns for HSBC and the broader banking sector.
The lender has been resisting shareholder pressure so far from Ping An to split its Asian and Western businesses. Nonetheless it is still focusing on streamlining its operations and growing its more profitable operations. Just yesterday, HSBC agreed to sell its business in Canada to the Royal Bank of Canada (TSE:RY) for 13.5 billion Canadian dollars.
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