August 26th, 2011 
Ryan Parker 
With no buyers coming forward so far, HSBC chief executive Stuart Gulliver announced that the credit card unit of HSBC Holdings, one of the top 10 financial organizations in the U.S. providing MasterCard and Visa credit cards, could be terminated. The $33 billion portfolio is just one of five key areas the company serves – personal and consumer finance, commercial and private banking and corporate investment banking and financial markets.
Although their credit card unit continues to be profitable, the CEO stated that the “card business wasn’t a strategic fit for HSBC.” Plans to divest are being hampered by the immense size of the credit card portfolio. Gulliver also hinted that this is a long term strategy to lower costs of up to $3.5 billion. In addition, the bank is reportedly looking to reduce its efforts in the retail banking segment in 39 markets as part of an effort to lift its profitability.
According to Reuters, few companies can afford such a large credit card portfolio, especially with increasing regulation of the credit card industry making it harder for lenders to turn a profit. It is unlikely with the current economic conditions a single company would be in a position to buy the whole portfolio. “If we can’t find a buyer we will put it into rundown,” Gulliver told reporters on the sidelines of a World Economic Forum event in Jakarta.
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Tags: Card Unit, Credit Card, Credit Card Unit, Unit