The chief executive officer for HSBC recently said it would begin running down its $33 billion credit card portfolio if there is no buyer, largely in an effort to save money and cut its stake in consumer banking, according to a report from Reuters. This came after news last month that HSBC wanted to cut about $3.5 billion in costs.
[Featured Tool: Get your free Credit Report Card from Credit.com]
The company also recently stated that the decision is not predicated on solely money-making – the credit card business is profitable and liquidity is strong, the report said. Instead, HSBC wants to focus more on emerging markets, because the American customer base is not linked to other aspects of its business. Now, HSBC plans to focus on other parts of the world, including Indonesia.
“The cost of re-engineering has to come from other parts of the world, and from being smarter,” HSBC CEO Stuart Gulliver said at a recent economic forum, according to the news service.
Experts warn that the company may have trouble finding a buyer for the portfolio, the report said. Any resultant rundown of the credit card business may take at least a few years.
The company may be looking to offload its credit card portfolio in part because American borrowers have drastically changed their credit habits since the end of the recession, typically spending less and paying more into their balances.
[Featured Product: Research and Compare Credit Card Offers on Credit.com]