HSBC accelerates its “pivot point to Asia”, pulls top executives from London to Hong Kong, scraps its US retail banking industry and plans further expansion in Singapore.
The moves, some of which are expected to be raised during a strategic update this week, come amid growing tensions between the West and China that have left the Hong Kong-based bank in a precarious position.
Managers moving to Hong Kong are likely to include Greg Guyett, co-head of global banking and markets, Nuno Matos, chief executive of wealth and personal banking, and Barry O’Byrne, chief executive of global commercial banking, according to people familiar with the matter with the case.
The relocation of the trio would mean that business divisions that make up almost all of HSBC’s global revenue would be from Hong Kong. According to people close to the bank, the staff members, who were first reported by Bloomberg, are dependent on the approval of the regulations. HSBC declined to comment.
“The goal is to have more people in Asia to address the commercial opportunity there,” said one senior figure at the bank. He added that the bank is relocating them so that it can grow faster and have a critical mass of world leaders in the region.
HSBC has been heavily criticized by British MPs and US politicians for endorsing controversial national legislation imposed by Beijing on Hong Kong and for closing the accounts of pro-democracy activists.
Greg Guyett © HSBC
Barry O’Byrne © HSBC
Meanwhile, HSBC has been criticized by Chinese state media after providing information to U.S. prosecutors that led to the arrest of a top executive at Chinese telecommunications group Huawei. However, Hong Kong CEO Carrie Lam has praised the bank over the past few weeks, saying she “would like” HSBC to expand in the city.
“The job for Mark Tucker is currently 80 percent politics and 20 percent business,” said one HSBC CEO. “The Chinese have the potential to destroy them.”
In addition to its annual results Tuesday, the bank is also preparing to announce a withdrawal of consumer banking services in the U.S., after concluding that it could not turn around the struggling unit, some people said.
The exit from the US retail network with 150 branches would be the end of the lender’s 40-year effort to run a full service bank in America. The division has been loss-making for the past three years.
In addition to China, HSBC also wants to expand into other fast-growing markets, including Singapore and India, the senior figure at the bank said. After local authorities have been in court for years, HSBC will in future lay the groundwork for an acquisition in Singapore, although it will not be part of Tuesday’s update.
Investors’ pressure for more drastic changes increases as the bank’s shares underperform. HSBC share has fallen 43 percent since Mark Tucker took over as chairman in October 2017. Noel Quinn was appointed interim chief executive in March after several months.
HSBC is also facing pressure from senior staff to drop their annual bonuses when they are announced this week. Like many credit providers, HSBC suffered a sharp drop in profits in 2020 due to an increase in expense debt during the Covid-19 pandemic and a decline in customer activity.
As part of this week’s strategy update, the bank is also expected to deepen austerity measures, expedite plans to simplify its bureaucratic organizational structure and improve sales of its 200-branch French branch network.
The move is intended to galvanize a refurbishment effort first announced last February to redeploy more than $ 100 billion in capital to Asia and reduce 35,000 jobs.
‘Economic realities mean that we planned to do in February [2020] we need to be even more urgent, ”Tucker told the Asian Financial Forum last month. He said the bank should “increase the pace, increase the intensity and increase the delivery”.
Quinn is also identifying a new top executive in Asia that will be key to boosting the bank’s closer relationship with China ahead of the retirement of Peter Wong, who has served as the region’s chief executive for a decade.
Peter Wong © HSBC
Wong, 69, a member of a political advisory body to China’s Communist Party, was key to easing tensions between the bank and Beijing over his role in the arrest of Huawei chief executive Meng Wanzhou.
Potential candidates to replace him include David Liao, head of global banking in Asia-Pacific, Mark Wang, head of China, and Louisa Cheang, CEO of Hang Seng bank, in which HSBC has a majority stake, according to two people who are close to the case. .