HSBC Group is launching a “strategic review” of its retail business in Egypt, the global bank said in a statement (pdf) released on Thursday afternoon. HSBC Egypt’s commercial and institutional banking units are not part of the review and remain core to its strategy here, it said.

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It’s difficult to name a multinational (or large Egyptian corporation) that doesn’t have a meaningful banking relationship with HSBC — and that doesn’t look likely to change. “Egypt is an important market for HSBC and has strong potential for growth. HSBC will continue to focus on driving two-way trade and investment flows to support multinational clients operating in Egypt and enable domestic wholesale clients to achieve their international ambitions,” the bank said in a statement.

So will HSBC sell? Not necessarily. A review is just that: They’re weighing options. “The HSBC Group review will cover HSBC Egypt’s retail banking business only. It will consider all options for the retail banking business, and no decisions have been made,” the bank said. In the meantime, it’s business as usual, particularly for what HSBC calls the “wholesale” side of the business, which includes its commercial and institutional banking units.

BACKGROUND- HSBC Group is positioning the review as part of its “ongoing simplification globally.” It has been pulling back from retail around the world, opting to focus in most markets on corporate and institutional banking as well as its private banking or “wealth” business. That process got underway in mid-2023, when then-CFO Georges Elhedery put 12 countries on an “exit watchlist” — and accelerated after he became CEO of the global bank in 2024 with a strategy to streamline and drive growth in core markets including Asia and the Middle East.

The bank exited South Africa this year and is in the process of selling its retail arm in Australia. This follows its full exit from Canada in March 2024, which saw its operations sold to RBC. HSBC has also announced or concluded plans to fully exit or sell its retail operations in France, Argentina, Bahrain, and Bangladesh.

HSBC isn’t alone: Multinational banks are “right-sizing” their emerging market operations, shedding capital-intensive retail arms to double down on higher-margin institutional and wealth management businesses.

However the review turns out, we expect HSBC’s corporate and institutional franchise to remain in Egypt for years to come. Egypt is material to the bank and HSBC Egypt for years now has been working overtime under CEO Todd Wilcox to lure fresh business here from Asia and other corridors. Serving high-margin corporate clients at home and abroad is HSBC’s bread and butter.

Depending on which way the review goes, HSBC’s options range from “do nothing” to “find a new home for the retail business.” If it’s the latter, individual clients could find their accounts transferred en masse to a different institution — it’s not without precedent in Egypt.

Back in August 2015, Citi’s local unit sold its retail portfolio to EGX-listedheavyweight CIB. CIB bought Citi’s deposit accounts, credit card portfolio, book of personal loans, and network of branches and ATMs. Many of Citi’s 900 employees joined CIB at the time, moving over at the same time as some 100k accounts, 90k credit cards, and nine branches. The transaction wrapped up over the course of 2016 and into 2017 as the Central Bank of Egypt shepherded the two institutions through the process.

How would a spinout work? The move would need CBE approval to sell or transfer its card, loan, and account portfolios to an acquiring bank. This involves a tough stress-test to make sure that the acquirer has the capital, liquidity, and operational capacity to take on the new assets and liabilities without taking a hit to its financial health. The CBE would also require the two to create a customer transition plan outlining what borrowers and depositors alike can expect — everything from assurances that credit cards and accounts will keep working to how loyalty points will be handled.

A rare transaction: The last big move in Egypt’s banking industry was FAB’s 2021acquisition of Bank Audi. Pundits have long suggested that with 37 banks (pdf), the industry here is ripe for consolidation. That has seen the CBE guiding institutions interested in entering the Egyptian market to look at acquisitions instead of applying for a new banking license. Standard Chartered entered Egypt last year not with a full domestic banking license, but under rules that allow foreign banks to upgrade representative offices here to a full branch that focuses primarily on corporate and investment banking, not taking deposits from retail investors.

HSBC by the numbers: The bank opened here in 1982 as the Hong Kong Egypt Bank and today has 4.2k staff and 53 branches. Egypt is also home to an HSBC “global service center” that provides support to HSBC operations globally.

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