HSBC is pulling back from its credit card operations in China eight years after its launch according to an article by Reuters on Friday. The bank has stopped issuing new cards and is working to phase out services for most onshore customers, three sources familiar with the matter said.
The decision follows failed attempts to sell the business, two of the sources added, while another said the bank may keep servicing credit cards for a small portion of “high-end” clients, but standalone customers will not have their cards renewed after their expiry.
“As part of our Premier and Global Private Banking services in mainland China, we continue to offer credit card services focused on international travel and lifestyle features,” an HSBC spokesperson told Reuters, without further elaborating on the bank’s plans for its broader credit card operations in the country.
While the business initially showed promise, reaching $500mn in outstanding balances within 18 months of its 2016 launch, growth stalled during China’s stringent Covid-19 lockdowns, which dampened consumer spending. China’s total credit card issuance peaked at 800mn in 2021 before declining to 767mn by 2023, according to data from Insight & Info Consulting.
China remains a loss-making market for HSBC’s wealth and personal banking, with the unit reporting a $46mn loss in the first half of 2024.
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Swiss private bank Lombard Odier has been charged with aggravated money laundering by Switzerland’s federal prosecutor. In a filing on Friday, the prosecutor said the bank played a “decisive role” in concealing the illicit activities of Gulnara Karimova, the daughter of Uzbekistan’s late president, Islam Karimov.
Prosecutors claim Karimova embezzled billions of dollars from Uzbekistan and laundered the funds through a Swiss-based organisation known as “The Office”. She was charged in September 2023 and denies the allegations.
The case, under investigation since 2016, also implicates a former Lombard Odier employee. The bank, one of Switzerland’s oldest financial institutions, has not yet commented on the charges.
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Marc Armengol will become chief executive of the UK’s TSB Bank in early 2025, succeeding Robin Bulloch, who retires after a 45-year career in retail banking, its Spanish owner Banco Sabadell announced on Friday.
Armengol joined Sabadell in 2002 and has been a TSB board member since 2022. He previously led TSB’s corporate strategy and was responsible for growing the British lender’s digital business.
The leadership change coincides with Sabadell’s efforts to fend off a hostile takeover bid from BBVA and restructure TSB to improve its profitability. In a statement, Sabadell’s CEO César González-Bueno reaffirmed TSB’s importance to the group, saying its “turnaround strategy” will continue under Armengol.
Acquired by Sabadell in 2015 for £1.7bn, TSB faced IT issues in 2018 that cost the bank £330mn and resulted in 80,000 customers leaving to competitors. TSB has since returned to profit, most recently posting a 23 per cent annual rise in its net third-quarter profit for this year to £59mn.
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European regulators have criticised London-listed fintech Wise for its anti-money-laundering controls, leading to a formal remediation plan, according to a Financial Times report on Friday, citing sources familiar with the matter.
A 2022 review by the National Bank of Belgium revealed Wise lacked proof of address for hundreds of thousands of customers, prompting a remediation plan to freeze non-compliant accounts and bolster its AML efforts.
In comments to the FT, Wise said it “fully implemented” the regulator’s recommendations, adding that “a third of our global team is dedicated to fighting financial crime”.
The scrutiny adds to Wise’s AML challenges, which include a $360,000 fine in 2023 from the UAE’s financial regulator for lapses in high-risk customer due diligence, and revelations that a Russian-sanctioned entity withdrew £250 in cash through its platform.
Wise temporarily halted onboarding UK and European business customers last year. Then-interim chief executive Harsh Sinha told the FT the company had underestimated the extent of additional due diligence required following sanctions introduced after Russia’s invasion of Ukraine.
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