Hong Kong Bank closing Saipan branch this year

Hong Kong and Shanghai Banking Corporation will close down its Saipan branch by the end of 2002, the HSBC Holdings Board announced yesterday.

The decision is in line with the banking institution’s move to reposition and reduce its operations in the Mariana Islands, HSBC Guam/Saipan Chief Executive Officer Guy Priestly said in a statement.

Priestly said that while the Saipan branch will completely cease operations by the year-end, the Guam office will stop offering transactional banking services and won’t be taking on new businesses with immediate effect.

He pointed out that the decision to streamline operations in the Marianas was triggered by the present economic environment, which, he said, makes it hard for HSBC to build a competitive market position.

“After 26 years in Guam and six years on Saipan, the HSBC Group did not take this decision lightly. However, the operation cannot deliver the value that our shareholders require in the long term,” he added.

The CEO pointed out that, although existing laws do not require notice or cause to terminate employment, “HSBC recognizes and appreciates the loyalty and hard work of its employees.”

“The bank is offering a reasonable severance payment plus certain fringe benefit to affected staff. HSBC thanks its staff for their loyalty and their hard work. HSBC is also deeply grateful for the patronage of its customers over the years and hope they will continue to use the services of HSBC Group elsewhere in the world,” Priestly said.

In line with the decision, the bank said that:

• it will no longer accept new accounts on Saipan or Guam, nor will renew expiring Time Deposits starting today;

• on June 3, HSBC will cease to provide remittance services at the counters of its Guam and Saipan branches;

• by July 31, HSBC will cease to provide Trade Services and will not support Hexagon as well as customer overdrafts, revolvers and trade lines converted to term loans;

It said that customers should have transferred their checking and savings accounts to other banks by July 31, adding that by August 30, any remaining checking and savings account will be closed, while outstanding balances will be held by the Bank until disposal instructions from the account holders are received.

On October 31, all Automated Teller Machines will cease to function and Time Deposits will roll off on maturity.

“There will be no change to existing term loans, unless customers prefer to repay immediately. We will convert any existing overdrafts, revolving loans, and trade facilities to term loans on case-by-case basis,” said Priestly.

The CEO appealed to all customers to arrange new checking and savings accounts with other banks on the islands by the end of July and not later than August 30.

Customers with existing loans were also urged to close their checking or savings accounts not later than August 31 and will be required to make loan repayments by checks.

“We realize that this may come at a difficult time for you and we will do all we can to ease the transition. Customers who only have a term loan from us will notice little difference and throughout this period, HSBC staff will be available,” the CEO said.

For inquiries, contact Stephen Grantham at (671) 647-8505 or (671) 647-8501.