HSBC is pulling back from its credit card business in China, eight years after launching the service, as it faced challenges in growing the operation and making it profitable, according to sources familiar with the matter.
The bank, which has focused heavily on expanding its presence in Asia, has stopped issuing new credit cards and is now working to wind down its offering to most onshore customers in China, three sources said. The decision follows unsuccessful attempts to sell the business, they added.
While HSBC plans to cease offering credit cards to many customers, it may continue servicing a small number of “high-end” clients, one source said. This could include clients who are part of HSBC’s Premier and Global Private Banking services. However, the bank will not renew credit cards for a significant segment of its customer base in China—those who hold cards but do not use other HSBC banking services in the country. These standalone credit card holders make up a large portion of HSBC’s card business in China, one source explained.
The pullback highlights the difficulties HSBC has faced in its efforts to expand in China, the world’s second-largest economy, as part of its broader strategy to deepen its presence in Asia. Despite significant investment, the bank’s credit card business has struggled to grow, facing stiff competition and a challenging economic environment.
An HSBC spokesperson confirmed the move, stating, “As part of our Premier and Global Private Banking services in mainland China, we continue to offer credit card services focused on international travel and lifestyle features,” without providing further details.
The exit marks a reversal of HSBC’s ambitious plan to rapidly grow its credit card business in China, which was launched in late 2016 as part of the bank’s pivot toward Asia and its efforts to expand retail banking and wealth management services in the region. By September 2019, the bank had about one million credit card users in China.
The business initially saw success, with HSBC reporting a $500 million outstanding balance within 18 months of launching the service. However, growth stalled in the following years, exacerbated by the impact of China’s stringent COVID-19 lockdowns, which sharply reduced consumer spending. Since then, the slowing Chinese economy has further weakened the market for credit cards. In fact, total card issuance in China peaked at 800 million in 2021 but dropped to 767 million by 2023, according to data from Insight & Info Consulting.
The decision underscores the challenges foreign banks face in China’s competitive financial services market, where regulatory hurdles and a shifting economic landscape have made it difficult for many international players to establish profitable operations.
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