RETAIL BANKING | Staff Reporter, Hong Kong

HSBC to revamp business model, flip income source: report

It is struggling to charge more for loans amidst falling interest rates.

HSBC has signalled that it would overhaul its business model, looking to switch its main source of income from interest rate to fee-based business, reports Reuters.

The bank has also hastened plans to shrink its size and will resume conservative dividend payments when able. The planned changes mark one of the biggest strategy shifts yet for HSBC, which has long promoted its ability to generate interest income from customer deposits.

However, with interest rates dropping to negative, the bank is grappling with charging more for loans to borrowers than it pays out to depositors.

Earlier this year, HSBC announced that it would merge its wealth and personal banking businesses in hopes to cross-sell more lucrative products across a wider client base.

It will also look at how it can bring in more fee income from corporate customers, having done well helping clients raise money through bond and equity financing.

Here's more from Reuters.

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