HSBC sells its 195 Buffalo Branches | Advantages Dealbook

HSBC , which is shutting down a dozn of its branches in the Tristate area, successfully sold its 200 odd acquired branches in Buffalo o a local First Niagara Financial ( fnfb.com) First Nigara has recently beocome a $800 mln revenues bank with the addition of Harleysville in 2010 and New Alliance Bancshares as recently as April. HSBC gets $1 bln in cash amounting to more than $5 mln per branch for the $15 bln in deposits. HSBC still has more than 100 branches in upstate New York. Other domestic U.S. competitors like Comerica, CIT and Key Corp are worth nearly 3-4 times the size of First Niagara in revenues. Key Corp and M&T bid for the bank branches in Buffalo too.(FT.com)

M&T already holds a 30% share  of deposits of the area , These branches would have added another 38% of the market share to M&T or other bidders had they succeeded. First Niagara now has an almost 50% market share in banks in the area if cleared by anti-trust. It already has $30 bln in assets and $18 bln in deposits in the New England states and Penn Capital One paid an even higher premium for ING’s $70 bln in deposits. Savings deposits thus would seem to be at 50% premium if compared with funds management purchases in the same period

The sale would unwind HSBC’s 1980 purchase of Buffalo-based Marine Midland Banks, which was founded in 1850 to serve the shipping trade on the Great Lakes. That takeover gave HSBC a major presence in Buffalo, where the National Hockey League’s Sabres play in the HSBC Arena.(Bloomberg)

 

Related articles

• HSBC to Sell Upstate N.Y. Branch Network to First Niagara for $1 Billion (dealbook.nytimes.com)
• HSBC sells 195 New York branches for $1bn (telegraph.co.uk)
• Report: HSBC plans to announce 10,000 job cuts (sfgate.com)
• HSBC USA is also the mainstay of Buffalo Economy (advantages.us)
• Cuomo lauds First Niagara – HSBC deal (timesunion.com)