Sold for a consideration of $1 billion based on May 31 figures
Branches continue to offer full customer services during transition; HSBC to retain commercial banking operations in upstate New York market
(HSBC Press Release) HSBC, through its wholly owned subsidiary HSBC Bank USA, N.A., and other wholly owned affiliates, has reached agreement to sell 195 retail branches, primarily in upstate New York, to First Niagara Bank, N.A., for a consideration equal to a premium of 6.67 percent of the deposits to be transferred on closing. Based on May 31 figures, the consideration would represent approximately $1 billion.
As part of its ongoing U.S. strategic focus on commercial and corporate banking, HSBC Bank USA remains committed to serving and further developing corporate banking relationships in upstate New York. In particular, the bank will continue to provide a full suite of international commercial banking offerings, including trade and cash management products and services through its four business centers in the region.
HSBC Bank USA is pleased to be working with First Niagara on this transaction, given its strong commitment to relationship banking and its historic roots in the region. HSBC Bank USA retail branches involved in the transaction will remain open for business throughout the transition and will continue to offer all products and services to customers. The all-cash transaction is expected to close in early 2012, subject to regulatory approvals and other customary closing conditions.
As at May 31, the branches held approximately $15 billion in deposits, $15 billion in gross assets including $2.8 billion in loans, and held $4.3 billion in assets under management.
"HSBC is committed to the U.S. and leveraging our international network and skill-set, which are our competitive advantages. This transaction is part of the strategy outlined in our May 2011 'Investor Day' presentation to align our U.S. business with our global network and meet the local and international needs of domestic and overseas clients," said Niall Booker, group managing director and CEO of HSBC North America. "We've been proud to serve the upstate New York community for many years and look forward to continuing our engagement in the region through a strong commercial and corporate banking presence. I would like to take this opportunity to thank our branch employees and retail branch customers in the region for their loyalty over the years. Our priority is to make this transfer as seamless for them as possible."
In addition to the sale of the retail branches to First Niagara, HSBC Bank USA has decided to consolidate approximately 13 branches located in Connecticut and New Jersey into nearby HSBC branches by the first quarter of 2012, subject to regulatory approval.
The 193 retail branches include 183 branches in New York's upstate region, four branches in northern Westchester County, two branches in Putnam County and six branches in Connecticut.
Statements from First Niagara (PDF files):