HSBC pulling out of China credit card business after struggling to make it profitable

From Investing.com: 2024-11-29 00:30:36

HSBC is pulling out of its credit card business in China after eight years, unable to make it profitable. The bank has stopped issuing new cards and plans to wind down services for most onshore customers. The decision comes after failed attempts to sell the business, facing challenges in growing its footprint in China.

The bank may continue to service credit cards for a small segment of “high-end” clients, but standalone credit card clients will not be able to renew their cards. HSBC launched the credit card business in China in 2016, aiming to grow rapidly, but faced challenges as the market shrank due to economic slowdown and COVID-induced lockdowns.

Within 18 months of launch, HSBC’s credit card business in China saw $500 million in outstanding balances before growth stalled. Total card issuance in China peaked at 800 million in 2021 but dropped to 767 million by 2023. HSBC faced stiff competition, regulatory restrictions, high acquisition costs, and fraud in the credit card business in China.

HSBC’s wealth and personal banking business in China is not profitable yet, reporting a $46 million loss in the first half of 2024. The Greater China region is the bank’s biggest income generator, but China remains a challenging market for the bank. Foreign banks like Standard Chartered and Bank of East Asia also offer credit card services in China.



Read more at Investing.com: HSBC pulling back from China credit card business after struggling to expand, sources say By Reuters