HSBC to add branches, staff in U.S.

By George Chen

NEW YORK (Reuters) - HSBC Holdings Plc (HSBA.L) (0005.HK), Europe's biggest lender, plans to expand its U.S. retail branch network and hire more staff despite the weak U.S. economy, a senior HSBC executive told Reuters on Tuesday.

London-based HSBC plans to add 22 new branches by the end of 2008, all of which will be outside New York with a focus on New Jersey, California and Washington D.C., said Kevin Martin, executive vice president of HSBC Bank USA, a wholly owned unit of HSBC Holdings.

The bank also plans to open 30 to 40 new branches in 2009 and expects to keep up such an annual growth rate to expand its retail network across the United States in the next few years, Martin told Reuters in an interview at HSBC's U.S. head offices in New York.

HSBC operates about 460 U.S. branches, including 380 in New York.

"By absolute number, we'll build more (branches) outside New York, simply because of our existing branch presence in New York," said Martin who is responsible for retail banking branch expansion across the world's biggest economy.

"In New York state we're very well placed in terms of branch network and, as a result, competitive, but outside New York state we have a smaller footprint and are continuing to grow," he added.

HSBC has no "mass program to reduce staff" in the United States, Martin said. Instead, to support branch expansion it plans to hire outside New York in places such as California and Florida, he noted.

HSBC also plans to boost its airport ad campaign, Martin said, and does not intend to cut marketing expenses such as sports and art event sponsorship that would promote retail banking in the United States.

HSBC has recently signed an advertising deal with Miami airport and the project is expected to be launched in two months, he said.

"We're looking at least one or probably two other airports in the U.S.," said Martin, noting that airport ads are a good way to reach international business travelers.

HSBC advertises in all three New York metro airports including John F. Kennedy, LaGuardia and Newark.

EXPANSION BEYOND NEW YORK

In the United States, HSBC's major rivals include Bank of America (BAC.N), which operates about 6,000 outlets nationwide, and Citigroup Inc (C.N) and JPMorgan Chase (JPM.N).

Both Citigroup and JPMorgan have strong New York networks that compete with HSBC for retail clients in particular, while HSBC usually has more customers and branches in emerging markets such as China than other Western banks.

HSBC has a roughly 15 percent share of the retail market in New York, making it one of the top three banks in the U.S. financial capital, said Martin.