Global banking giant HSBC is considering withdrawing from Turkey after 30 years as part of a wider programme of cost-cutting in underperforming markets, according to reports this morning.
According to Reuters, the British-based bank is considering exiting Turkey if it can secure a local buyer for its operations in the country. The proposed closure would form part of interim chief executive Noel Quinn's strategy of refocusing the bank on its profitable Asian markets, particularly China.
The Banks Association of Turkey says that since 2013 HSBC Turkey has progressively slimmed its operations, reducing its number of branches from 315 branches and 6,000 staff in 2013 to around 80 branches and 2,000 staff as of September 2019.
In 2015 the bank tried and failed to secure a buyer for its Turkish business, and implemented further branch closures and restructuring as a result.
Since then Turkey has continued to be problematic for HSBC, with currency volatility in the Turkish lira and a swathe of loan losses within the subsidiary. In the currency crisis of 2018 the lira shed more than 30% of its value against the dollar.
Sources told Reuters HSBC was also reviewing its operations in Armenia, Greece and Oman, where the bank is facing similarly strong competition from local rivals.
Meanwhile, in Paris
If it goes ahead, the exit from Turkey would mark one of the biggest retractions for the bank in recent years. In France, HSBC has also begun the sale of its retail operations. The bank is considering interest from French lenders including BNP Paribas, Milleis Banque (formed from the acquistion of Barclay's French operations in 2015), Credit Agricole and Credit Mutuel.
Although headquartered in London, HSBC has a long history in Asia, and particularly China. Last year HSBC reported its Asian revenues grew by 11% year-over-year to $28.8bn in 2018. Asia accounted for nearly 49% of the group's total revenue while pre-tax profit of $17.8bn in Asia accounted for 90% of the bank's total pre-tax profit.
HSBC declined to comment on reports of its Turkish operations.