HSBC has announced another round of bank branch closures, with 114 outlets set to close next year. In 2022, the bank shut down 69 branches.
The bank has come under pressure from its largest shareholder, Chinese insurer Ping An, to increase efficiency and reduce costs. Campaign groups are concerned this could affect low-income households who mostly rely on cash for their daily spending.
For its part, the lender has said it is simply trying to adapt to the fact that customers prefer digital channels.
To reduce its international exposure, HSBC has also agreed to sell its Canadian business to Royal Bank of Canada for $10bn.
The Covid-19 pandemic has accelerated digitalisation plans for most corporations. However, operating costs for some of the biggest banks are difficult to cut in the space of only a couple of years, especially given that in most cases increased digitalisation requires greater investment.
HSBC has slightly reduced its operating costs, which went from $33.0bn in 2017 to $29.2bn in 2020. However, the figure increased again to $30.3bn in 2021.
Citigroup has seen operating costs steadily increase since 2019, to reach $47.9bn at the end of last year.
French lender BNP Paribas made a good effort to decrease the figure in 2021, shaving off $3.5bn, while Crédit Agricole Group decreased operating costs in the same period by just $500m.
