HSBC Private Bank, part of the UK- and Hong Kong-listed group, will no longer offer services to US residents outside of the country, joining a growing list of banks to pull out of this sector.

The firm said that, following a review, the decision was taken to withdraw services provided to private clients from locations outside the US; this decision is understood to affect only a relatively small number of clients – in the hundreds. The bank declined to give a figure for the assets affected.

The private bank will continue to offer all of its wealth management services to clients through branches in the US. Clients have been advised to close their accounts over the next 30 days, and HSBC has appointed a team of people to help transition clients to the US domestic private banking operation.

In 2010 it emerged the Department of Justice was carrying out a criminal investigation of HSBC clients who may have failed to disclose accounts in India or Singapore to the Internal Revenue Service. As previously reported, the IRS, which has already locked horns with UBS in a high-profile tax evasion case that has hit Swiss bank secrecy, has turned its gaze eastward to centers such as Hong Kong and Singapore.

However, this recent decision is understood to be a strategic move by the bank, and not related to any requirements as part of that probe – which relates to HSBC India. The closure, on the other hand, affects the global private banking operation.

The compliance burden to serve this market is heavy, and the pressure on such offshore accounts has already caused a number of banks to change their strategy. UBS, along with fellow Swiss banks Wegelin and Julius Baer, no longer provides offshore banking services to US clients. Meanwhile, in June, it was reported that Vontobel, another Swiss bank, had set up a unit to deal with US citizens who have declared Swiss accounts.

Other banks, though, are taking a different tack: RBC Wealth Management has said it still regards the expat US citizen market as a valuable one to be wooed.

“Recent legislative changes have meant that a number of global wealth managers are reconsidering their servicing of US clients from non-US platforms. While some baulk at the additional legislative burden and are exiting the market, RBC Wealth Management not only remains committed to the market, but we see this as a terrific opportunity to gain market share for our London-based business,” Ralph Awrey, managing director, business development for North America at the firm, told this publication in a recent interview. (To view, click here.)