HSBC plans to enter Japanese retail market next year

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Tokyo, HSBC Holdings PLC is considering entering the Japanese retail market but has not made any decision yet, a spokeswoman said.

HSBC spokeswoman Vinh Tran in Hong Kong told Agence France-Presse, "There are discussions underway but no details have yet been firmed up. We will focus on the mass-affluent sector and we do have plans to expand the distribution network."

The Financial Times reported that HSBC is set to launch retail banking operations in Japan early next year and plans to open as many as 50 branches within four years, the Financial Times reported on Friday.

HSBC will seek to steal wealthy customers away from the Japanese banks and vie with US financial giant Citigroup which is expanding its Citibank network in the world''s second-largest economy, the London-based newspaper said, citing unnamed people familiar with the situation.

The investment will cost hundreds of millions of dollars and the UK-based bank is aiming to focus primarily on the Tokyo market and then branch out to other cities, such as Osaka and Nagoya, it said.

"Retail banking is an area we're looking at," said Paul Allen, a spokesman for HSBC's Japan operation. "We can't give you any information now. We're not in a position to do that."

HSBC already has a presence in Japan but it mainly focuses on wholesale banking and securities operations.

The report comes after Citigroup announced a Japanese retail banking expansion in January. The U.S. bank plans to set up a new locally incorporated entity and double its retail network to 60 branches in the next several years.
It plans to open five new branches during 2007.

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