Implications for home loan customers confirmed
HSBC has announced its intention to exit its wealth and personal banking business in New Zealand.
The global financial services company, which has operated in New Zealand for over 35 years, confirmed that the withdrawal would take the form of a phased wind-down, expected to take place over several years.
In a statement released on June 13, HSBC said the decision followed a “strategic review” of the business and that it reflected the “rapidly evolving commercial, regulatory and technology environment for running a sustainable retail business”.
Financial Advice New Zealand CEO Katrina Shanks (pictured immediately below) said that HSBC’s decision to wind down its retail banking business in New Zealand was a reflection of commercial changes as banks respond to the current operating environment.
“It’s disappointing to see a significant player in the sector withdraw, as more providers represent more choice for the customer,” Shanks said.
“However, there remains a range of providers which New Zealanders can access, which is positive.”
New home loan applications closed
The bank stopped accepting new home loan applications (including top up requests for existing loans) from June 13, 2023.
Any applications submitted prior to this date that had received a formal letter of offer or pre-approval letter would be honoured, the bank said.
Options for existing HSBC mortgage customers
In response to questions from NZ Adviser, an HSBC spokesperson confirmed that the bank would continue to honour its contractual obligations to its existing home loan customers.
“HSBC will honour all existing home loan business,” the spokesperson said.
Existing HSBC home loan customers are unable to top up their loan or make changes to existing interest-only terms, meaning these customers will remain with those same terms, the spokesperson confirmed.
Customers with a fixed rate home loan maturing before September 13, 2023 would be offered a further fixed rate term for a maximum period of 6 months, to allow time for them to find another service provider.
“Thereafter, their loans will switch to a floating rate,” the HSBC spokesperson said.
HSBC customers with a fixed rate home loan maturing after this date will move to a floating rate when their home loan matures.
HSBC said that the bank remained “committed” to the New Zealand market and that it would continue to operate and grow its wholesale banking business. This includes commercial banking and financial institutions and government, along with its markets and securities business.
“Each of these businesses are primarily focused on supporting internationally orientated clients that benefit from the HSBC Group’s unique global network and international financial capabilities”, HSBC said.
