HSBC is pulling back from its credit card business in China, Reuters reported, citing unidentified sources.
The lender has struggled to grow the business and make it profitable eight years after its launch in mainland China, the news agency said. It has stopped issuing new cards and is working toward winding down the service offered to a large part of its customers in the country, Reuters said.
The bank’s “standalone” credit card clients who do not use HSBC banking services in China will not be able to have cards renewed upon expiry, it reported, citing a source.
“As part of our Premier and Global Private Banking services in mainland China, we continue to offer credit card services focused on international travel and lifestyle features,” a spokesman for the bank said, declining to comment further.
Global banks have been struggling to expand their business in mainland China, where local competition is fierce and as the world’s second-largest economy has struggled to expand.
At the same time, US President-elect Donald Trump has raised uncertainty about doing business in China with new broad tariff proposals.
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China is a relatively small market for HSBC’s credit card business. The gross carrying amount in this segment was just US$287 million ($384.01 million), or about 1% of the global total last year, according to its 2023 annual report.
The onshore business has been shrinking over the past few years, down from about 2.5% of the firm’s global credit cards business in 2019, despite China’s further opening up of its financial sector to foreign firms.
HSBC earlier this year unveiled a broad restructuring across different business lines and geographies as newly appointed CEO Georges Elhedery embarks on an ambitious effort to cut costs at the banking behemoth.
As part of the changes, the bank created a new international wealth and premier banking business that will be overseen by Barry O’Byrne.
