HONG KONG/SHANGHAI -HSBC Holdings Plc is reviewing expenses and operational controls at its China digital wealth business Pinnacle, in a move that could result in layoffs and mark an abrupt reversal of the lender's ambition for the unit, several sources said.
A downsizing of Pinnacle, which was launched in 2020 and sells insurance and fund products, would be a setback for Europe's largest lender by assets, which has doubled down on Asia while divesting from less-profitable businesses elsewhere. Pinnacle, through its reliance on digital, was meant to expand the bank's reach outside its limited physical branch presence in China.
The Pinnacle review underscores the challenges HSBC faces in boosting revenue in China. The Greater China region, which includes Hong Kong and Taiwan, is the group's biggest income generator. In one instance, for example, an external event management company charged Pinnacle for more than two dozen customer engagement and promotional events in one day earlier this year, one of the sources said.