HSBC Holdings Plc is turning to a startup to help it pick up more middle-market customers.
The bank is working with Neptune Financial to offer online commercial loans in the United States. HSBC is targeting companies in cities including St. Louis, Minneapolis, and Jacksonville, Florida, where it doesn't already have a physical presence. Loan values will range from $1 million to $100 million.
“I would classify it as radical growth,” EJ Achtner, head of digital banking at HSBC's U.S. commercial unit, said in an interview. He described the partnership as a cost-efficient way to expand middle-market reach.
London-based HSBC isn't alone in its push into the middle market. Goldman Sachs Group Inc. is looking to boost revenue by $5 billion, in part by selling more services to midsize companies. It also joins regional U.S. banks that have been looking to offer more online loans.
The deal bolsters HSBC's effort to grow its commercial bank through a digital partner platform launching this year. It's part of a larger goal of turning around the U.S. business, which is the firm's “most challenging strategic priority,” CEO John Flint said earlier this month.
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