HSBC Buyout No Longer Just a Rumor
The end of July brought an announcement that has been in the rumor mill for quite a while, and that is the HSBC buyout by First Niagara Financial Group. In the announcement, First Niagara announced that they were going to buy 195 retail branches from HBC for $1 billion in cash.
As with any similar announcements, the announcement about the pending HSBC buyout left analysts wondering what the results would be. Many answers are still unknown, but some are starting to come to light.
One interesting fact about the buyout is that the branches that First Niagara is purchasing have deposits that total $15 billion. That is a nice return on investment. Yet, even though these banks are apparently fairly successful, First Niagara has announced its plans to shut down some of the branches to comply with antitrust regulations and save a little money.
Of course, this left many employees worried about their jobs. First Niagara has stated that it will do all it can to keep the 1,900 bank employees employed. For the branches that First Niagara sells, they wish to have the purchasing company retain the employees so they can continue working even after all of the buyouts are over.
The entire process is going to take a while to complete, and as the banks work through this transition time, more questions will be answered. Analysts seem to think it will be complete by early 2012. At that time, all of the fallout will be better known.
What types of questions to analysts still have? Some wonder how many banking branches are going to be closed or sold. Others wonder who will be doing the buying, with guesses that it may be local banks that are preparing to expand who will do the purchasing. While First Niagara claims it is going to work hard to maintain jobs, many are wondering how this will really pan out when the rubber meets the road. There are likely going to be some job losses or shifts at some point through this process. The impact of these is yet to be known.
HSBC Atrium Proves The Bank Will Continue
HSBC is not going to be going anywhere, however, even in light of this buyout. That is a relief for many who live in the region. In fact, the recently announced renovations to the HSBC Atrium, which will increase its capacity from 800 to 2,000, shows that it plans to continue having a strong influence in New York, in spite of losing most of its upstate branches.
When the multi-million dollar expansion and renovation to the HSBC Atrium is complete, rumor has it that HSBC will move much of its operations to the building, leaving their current location, which is being leased until 2013. While that does not bode well for their current landlord, it does bode well for the Buffalo area, as new jobs will be created and an important financial entity will continue to remain a strong influence in the area.
