By Saabira Chaudhuri
HSBC plans to sell 195 of its bank branches in upstate New York and Connecticut to First Niagara Financial Group as part of a $1 billion deal. If you’re a current HSBC customer in that region, it’s time to reassess the merits of your checking account.
As part of the deal, First Niagara will acquire more than one million bank accounts and roughly 250,000 credit card accounts, says spokesman Jeff Schoenborn. HSBC and First Niagara will be reaching out to affected accountholders in coming days, but say it’s business as usual until the transaction is completed, likely early next year. At that time, First Niagara will give customers new account numbers, as well as new check books, debit and credit cards. “Customers should expect a seamless transition,” says Robert Sherman, a spokesman for HSBC.
Those HSBC customers in transition can expect changes to the terms and fee structures of their accounts, bringing them more in line with First Niagara policies, says Greg McBride, a senior financial analyst at Bankrate.com. Mark Rendulic, the executive vice president of retail banking at First Niagara, says most will be transferred into a comparable First Niagara banking account, but that the bank is also considering creating new products.
As it stands, some current HSBC customers may see costs decrease. HSBC, for instance, currently charges a monthly fee of $3 for its basic checking account, while First Niagara offers a similar product for free. Both offer similar higher-tier “Choice Checking” accounts, but First Niagara has a lower balance requirement to waive the monthly maintenance fee ($300 versus $1,500). It also offers two benefits HSBC does not: a free order of checks and two free non-First Niagara ATM transactions each month.
Those ATMs may prove a boon for some customers and a pain for others. Customers primarily looking for local ATM access will see more options under the transition. Schoenborn expects that First Niagara will have about 200 bank branches in New York after the deal closes next year, up from 117 currently. But travelers used to the broad ATM and branch access of HSBC, which operates in 88 countries, are likely to feel cut off. First Niagara operates in just four states: upstate New York, Pennsylvania, Connecticut and Massachusetts.