After a 70-year presence in the sultanate, the Hong Kong and Shanghai Banking Corporation (HSBC) Brunei shuttered the doors on its flagship branch in Bandar Seri Begawan on Friday.
Crowds and former HSBC employees gathered outside the Bandar branch as the distinctive red and white logo was taken off the building by workers last night.
In April 2016, the global banking giant announced it was winding down operations in the sultanate as part of global strategy to focus on its core business in fewer markets. In the past five years, HSBC has closed or wound down its businesses in 83 countries, including the sale of business operations in Brazil.
The move was “not a reflection of the economic environment in Brunei”, the bank said at the time of the announcement. HSBC Brunei assets stood at $3.5 billion as of December 31, 2015.
HSBC had nine branches across Brunei and 500 employees. The lender said affected staff would be treated “fairly and in line with the [bank’s] values and statutory requirements”.
On September 26, 2017, HSBC Brunei confirmed the sale of its retail and commercial banking portfolios to Baiduri Bank, a local lender whose primary shareholders include Baiduri Holdings, Royal Brunei Airlines, Royal Brunei Technical Services and BNP Paribas.
“Some of the key aspects of HSBC Brunei’s wind down principles is to treat our customers fairly and minimise disruption to the financial services in Brunei. This sale is considered to align to these wind down principles, the bank said in a statement.
HSBC Brunei said they were not able to disclose the value of the transaction due to confidentiality.
All existing HSBC customers will have their accounts, including car hire-purchase arrangements, transferred to Baiduri by November 13.
Customers are not required to do anything at this stage, and will be contacted by Baiduri if further documentation is required. HSBC debit and credit cards can still be used for three months from the date of transfer, or until customers receive a new Baiduri Bank card.
HSBC Brunei was established in 1947 and opened its first branch in the capital which was then known as Bandar Brunei.
The winding down of operations will make HSBC the second international bank to exit Brunei following Citibank in 2014.
Bank of China was granted approval to operate in the sultanate last year, making it the first Chinese financial institution to establish a presence in the country.