HSBC is accelerating its “pivot for Asia”, transferring top executives from London to Hong Kong, discarding its retail banking operation in the United States and planning for further expansion in Singapore.
The measures, some of which are expected to be lifted during a strategic update this week, come amid growing tensions between the west and China, which have left the UK-based bank based in Hong Kong in a precarious position.
Executives who will move to Hong Kong are likely to include Greg Guyett, co-director of global banks and markets, Nuno Matos, chief executive of fortune and personal bank and Barry O’Byrne, chief executive of global commercial bank, according to familiar people. how they care.
The relocation of the trio would mean that the business divisions that account for almost all of HSBC’s global revenues will be outside Hong Kong. Personnel changes, first reported by Bloomberg, are pending regulatory approval, according to a person close to the bank. HSBC declined to comment.
“The goal is to have more people in Asia to handle the business opportunity there,” said a senior figure at the bank. He added that the bank was relocating them so that it could grow faster and have a critical mass of global leaders in the region.
HSBC has been severely criticized by British lawmakers and American politicians for endorsing a controversial national security law that Beijing has imposed on Hong Kong and for closing the accounts of pro-democracy activists.
Greg Guyett © HSBC
Barry O’Byrne © HSBC
Meanwhile, HSBC was criticized by Chinese state media after it provided information to US prosecutors that led to the arrest of a senior executive in the Chinese telecommunications group Huawei. However, Carrie Lam, Hong Kong’s chief executive, has praised the bank in recent weeks, saying it would “love” for HSBC to expand in the city.
“Mark Tucker’s work is 80% political and 20% business at the moment,” said an HSBC executive. “The Chinese have the potential to destroy them.”
Along with its annual results on Tuesday, the bank is also preparing to announce a withdrawal from the bank to consumers in the United States, after concluding that it cannot recover the struggling unit, some people said.
Leaving the United States retail chain with 150 branches would mark the end of the lender’s 40-year attempt to run a full-service bank in America. The division has suffered losses in the past three years.
In addition to China, HSBC also wants to expand into other fast-growing markets, including Singapore and India, the bank’s senior figure said. After years of being courted by local authorities, HSBC is laying the groundwork for an acquisition in Singapore in the future, although that is not part of Tuesday’s update.
Investor pressure for more radical changes has increased as the bank’s shares underperform peers. HSBC’s shares have fallen 43 percent since Mark Tucker took over as chairman in October 2017. Noel Quinn was named chief executive in March after several months as interim director.
HSBC is also facing pressure from senior employees who are preparing for a reduction in their annual bonuses when they are announced this week. Like many lenders, HSBC experienced a sharp drop in profit in 2020 due to an increase in bad debt expenses during the Covid-19 pandemic and a drop in customer activity.
As part of this week’s strategy update, the bank is also expected to deepen cost-cutting measures, accelerate plans to simplify its bureaucratic organizational structure and update on the sale of its French retail chain of 200 branches.
The measures are aimed at galvanizing a review effort announced just last February to redistribute more than $ 100 billion of capital to Asia and cut 35,000 jobs.
“The economic reality means that what 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 needed to “accelerate the pace, increase intensity and increase delivery”.
Quinn is also in the process of identifying a new senior executive in Asia who will be the key to navigating the bank’s closest relationship with China before the retirement of Peter Wong, who served as chief executive in the region for a decade.
Peter Wong © HSBC
Wong, who is 69 and a member of a political advisory body to the Communist Party of China, was instrumental in easing tensions between the bank and Beijing over its role in the arrest of Huawei executive Meng Wanzhou.
Potential candidates to replace him include David Liao, head of the Asia-Pacific global bank, Mark Wang, head of China, and Louisa Cheang, chief executive of Hang Seng bank, in which HSBC holds a majority stake, according to two people close to the subject. .