HSBC Bank Canada is pulling the plug on its HSBC Financial consumer lending business — a move that will result in the closure of 75 HSBC Finance offices in Canada, including one in Red Deer.
The division lends through private-label credit cards and underwrites consumer loans. It operated as Household International before being acquired by the HSBC Group in 2003, and has already been wound down in the United States and the United Kingdom.
HSBC spokesperson Sharon Wilks said the Red Deer office at No. 44, 6320 Gaetz Ave. will close “as soon as practical,” and likely within a month.
She wasn’t sure how many employees would be impacted, but said initial job losses in Alberta would be 56. The count is expected to be approximately 500 Canadawide.
Wilks said HSBC Financial customers will continue to make payments on their unsecured loans and mortgages until their terms expired. For most people, this is done via automatic withdrawals from bank accounts.
“For them, absolutely nothing happens,” she said.
“We’re not in any way, shape or form demanding that they pay it tomorrow or anything like that.”
In fact, said Wilks, the wind-down of HSBC Financial is expected to take several years. But its offices will close immediately and no new loans will be granted.
Call centre support will be available to customers, said Wilks.
She stressed that the HSBC Financial closure in no way affects HSBC Bank Canada, a full-service bank with a branch in Red Deer at No. 108, 4909 49th Ave.
“The HSBC Finance is a separate brand; it’s a separate set of offices.”
HSBC said in a news release on Wednesday that its consumer finance business no longer supported its core businesses.
“Building on the solid base we have built over the last 30 years, we are continuing to make significant investments to grow HSBC Bank Canada’s core businesses in commercial banking, global banking and markets, and retail banking and wealth management,” said HSBC Bank Canada president and CEO Lindsay Gordon.
She confirmed that efforts were made to sell the consumer finance business, but a suitable buyer could not be found.
Last year, HSBC sold its Canadian full service investment advisory business to National Bank of Canada for $206 million. The sale followed an announcement by HSBC Canada’s corporate parent that it would cut 30,000 jobs worldwide by 2013 and sell almost half its U.S. retail bank branches.
Vancouver-based HSBC Bank Canada is a unit of HSBC Holdings PLC, one of the world’s largest banking and financial services companies.
With files from The Canadian Press.
hrichards@www.reddeeradvocate.com