Financial services company KeyCorp (KEY: Quote) said Thursday its the wholly-owned subsidiary KeyBank N.A. is on track to acquire 37 retail banking branches of HSBC Bank USA, N.A., a unit of HSBC Holdings plc (HBC: Quote,HSBA.L) in Buffalo and Rochester from First Niagara Financial Group, Inc. (FNFG: Quote). The closure of the deal is expected to occur on July 13.
The deal will see KeyBank buying 26 HSBC Bank branches in the Buffalo market and 11 in the Rochester market, assuming about $2.4 billion in deposits and nearly $400 million in loans. This will also bring the total number of KeyBank branches in those markets to 99.
"Western New York and Rochester are attractive markets for us. We look forward to welcoming HSBC customers and employees to the KeyBank family as we continue to make local investments through our lending, civic and community support, and volunteerism." KeyCorp Chairman and CEO Beth Mooney said in a statement.
The divestiture of the branches comes on the back of an agreement reached in November between First Niagara and the Department of Justice following its customary antitrust review for approving a deal by First Niagara to acquire HSBC branches.
First Niagara agreed in late July 2011 to acquire 195 Upstate New York and Connecticut branches and $15.0 billion of deposits from HSBC Bank for a total consideration of about $1 billion.
"Everything is proceeding according to plan and we are excited about the reaction we've received from customers, employees and the community. We've been working very closely with HSBC to ensure a smooth customer conversion," said Bill Koehler, president, Key Community Bank.
KeyCorp provides deposit, lending, cash management and investment services to individuals and small businesses in 14 states under the name of KeyBank N.A.
KEY closed Wednesday's regular trading session at $7.64, unchanged on a volume of 12.90 million shares, and HBC closed at $44.39, down $0.24 on a volume of 2.23 million shares, while FNFG closed at $8.11, up $0.05 on a volume of 3.24 million shares.
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by RTT Staff Writer
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