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Tag: HSBC

  • Vietnam 19th best country in the world for expats: HSBC survey

    Vietnam 19th best country in the world for expats: HSBC survey

    Vietnam has climbed four places to 19th in the list of best countries for expats to work and live, an HSBC survey found. With an average annual income of $90,408, nine out of 10 expats said in Vietnam they are as happy as or happier than at home, according to the 11th annual Expat Explorer issued by HSBC on Wednesday.

    Foreigners enjoy working in Vietnam for many benefits: 55 percent of respondents said they take more holidays, 41 percent live in a better home and 39 percent have more household staff compared to their home country.

    Fifty-seven percent said their employment contracts include an annual allowance to fly home or to another place, higher than the global average of 17 percent.

    Forty-two percent get an accommodation allowance while the global average is 18 percent, and 73 percent receive health and medical allowances compared to 43 percent elsewhere.

    Vietnam ranks first in the world with 72 percent saying moving to Vietnam helps them save more and 72 percent also saying they have more disposable income than they did in their home country.

    Both are higher than the global average: 52 percent for savings and 56 percent for disposable income.

    There are also some downsides for foreigners living in the country, respondents said. While more than half of expats across the world said they enjoy the better overall quality of life, only four out of ten foreigners in Vietnam said so.

    Organizing finances is difficult for expats, with only 27 percent of foreigners saying it is easy to open a bank account, buy insurance or pay taxes, while the global average is 43 percent.

    Just more than a third had no difficulty in experiencing healthcare services, but this figure is 46 percent globally.

    Raising a child in Vietnam poses challenges, with just 18 percent saying the quality of child care is better than in their home country, compared to the global average of 38 percent.

    Forty-seven said Vietnam is a good place for expats who want to progress their career, while the global average is 56 percent.

    There are financial issues that concern expats in Vietnam, with 37 percent being worried about restrictions on moving money out of the country and 22 percent each concerned about less favorable exchange rates and job security.

    Sabbir Ahmed, head of retail banking and wealth management at HSBC Vietnam, said: “The survey shows Vietnam is a promising host country for expats who are seeking both opportunities and challenges to boost and develop their careers.

    “We expect Vietnam to improve several areas to enhance the experience of expats and their families by developing further the environment, educational programs and financial services.”

    The ranking listed Singapore as the best place in the world for expats for the fourth year in a row, followed by New Zealand, Germany, Canada, and Bahrain.

    The survey polled 22,318 people from 163 countries and territories through an online questionnaire.

  • HSBC Appoints New Chairman for Singapore

    HSBC Appoints New Chairman for Singapore

    HSBC Singapore appointed Mukhtar Hussain as chairman effective this week, the company said in a statement. The local subsidiary of HSBC  includes the retail banking and wealth management business in the city-state. It was formed when the bank incorporated its retail operations in May 2016.

    «Mukhtar’s presence, experience and counsel will go a long way to support our three-year growth plans – not just for retail banking – but across all of our business lines,» said Tony Cripps, chief executive officer of HSBC Singapore.

    Regional Knowledge

    On the consumer banking side, HSBC will tap on Mukhtar’s regional knowledge to provide oversight of the bank’s strategy to capture the personal wealth that is flowing from Asean markets into Singapore.

    «On the institutional side, his role in spearheading HSBC’s regional activity in support of BRI will be invaluable in advising Singapore on how it can further position itself as a strategic partner of this multi-decade investment programme,» said Cripps.

  • HSBC is making a bet on Asia millionaires

    HSBC is making a bet on Asia millionaires

    HSBC Holdings is planning to increase its wealth-management staff in Asia as chief executive officer John Flint bets on growth in the region.

    The bank plans to add more than 1,300 positions, split roughly between retail and private banking, by 2022, according to the heads of the two divisions, which between them currently employ just over 32,000 people in the region. The bulk of the hires, some of which could be internal, will be in Hong Kong and Singapore.

    The wealth strategy is part of Mr Flint’s plan to grow HSBC by expanding in Asian markets including Greater China and South-east Asia. The CEO, promoted in February, said in June that HSBC will pour as much as US$17 billion by 2020 into expanding the region’s business and improving technology. The bank aims to grow revenue from Asia by at least US$1 billion during the same period.

    “We have a real opportunity to do more and that’s to further build on Hong Kong and to materially build what we do today in Singapore,” Kevin Martin, the firm’s Asia-Pacific head of retail banking and wealth management, said in an interview. “Both businesses need to do it in concert,” he said, referring to the retail and private banking units.

    THe London-based bank’s plans for wealth management in Asia, which is dominated by global banks such as UBS Group AG, Citigroup Inc and Credit Suisse Group AG, come as regional firms including DBS Group Holdings Ltd. and BOC Hong Kong (Holdings) Ltd are also expanding amid an unprecedented rise in the region’s assets.

    HSBC said on Monday that Antonio Simoes, who was head of UK and Europe, will run global private banking from Jan 1. Peter Boyles, who currently runs the group, will retire after 43 years at the company.

    Offshore wealth in Asia, excluding Japan, has been growing at about 10 per cent a year, according to Boston Consulting Group data, faster than the 5 per cent globally. Offshore wealth from China alone amounted to about US$1 trillion this year, the consulting firm estimated.

    Hong Kong’s wealth managers expect to double the money they handle over the next five years to about US$2 trillion, the city’s Private Wealth Management Association said in a recent report published with KPMG China, citing the increasing interest of Chinese nationals looking to diversify their holdings.

    “The wealth that the Chinese have already offshore is a massive piece of opportunity for us,” said Tan Siew Meng, Asia-Pacific head of global private banking at HSBC.

    The expected growth in the industry may exacerbate Hong Kong’s shortage of relationship managers, according to the Private Wealth Management Association’s report. Two-thirds of respondents said a “limited talent pool” was the biggest supply-side constraint.

    Mr Martin said the 1,300 staff boost is “not a big scary number” given that his retail bank, including subsidiary Hang Seng Bank Ltd, employs about 31,000 people in the Asia-Pacific region. Staff within the group may transfer to the wealth business, he said. Hiring will be both internal and external, and include relationship managers, product specialists and advisers, Ms Tan said. Her private bank had 1,100 employees in the region at the end of last year.

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  • HSBC targets wealthy Asians in $15-17bn cash injection

    HSBC targets wealthy Asians in $15-17bn cash injection

    HSBC has announced plans to invest between $15-17bn in improving its technology and businesses in Asia where it anticipates significant growth, particularly in the wealthy middle class and high-net worth sectors.

    The global financial and banking giant said on Monday that it targets a return on tangible equity (RoTE) of over 11% by 2020.

    Speaking to journalists in Hong Kong, recently appointed chief executive John Flint said that the growth of the Asian middle class sector has led the company to invest in the region to cope with what he believes with be an increased demand for financial services products.

    Flint, who took over from outgoing CEO Stuart Gulliver in February said that the group will target the fast-growing wealth in Asia, particularly China, in a bid to get back into “growth mode” and will invest in retail banking and wealth business, particularly in Hong Kong, he said via a conference call.

    Asia ex-Japan is predicted to account for 28% of the $223trn private financial wealth globally, according to a BCG Global Wealth 2017 report, with the middle class in Asia predicted to rise 2.5 times to 3.5bn by 2030 from 2015.

    Significant

    This latest move is a significant change of strategy as it follows on from years of restructuring and cost-cutting at the financial giant, but it is one that Flint believes will keep rewards.

    “In dollar terms, the biggest opportunity by customer group will come from retail banking and wealth management,” Flint said. “Wealth creation in Asia, particularly in Hong Kong through [China] is significant.” The biggest opportunity by customer group will come from retail banking and wealth management, he said.

    HSBC said that is is now targeting revenue growth of over $3bn from its Hong Kong business including retail banking, wealth management and others by 2020, and another U$1bn+ revenue growth from its wealth management business elsewhere in Asia.

    In Hong Kong, it will target investments in growing its millennial client base and non-resident Chinese customers.

    Technology

    Looking at technology, the majority of the group’s investment will be in new digital banking capabilities, such as those used in its wealth management and trade finance businesses. In the UK, HSBC will also invest in a mobile banking app that relies on artificial intelligence and data analytics.

    Flint also said on Monday that the group has been rebuilding its credit card business over the last 12 months. In October 2017 it launched its own branded credit card in the US, adding that the right model to operate in the country was one backed by universal banking.

    “[We] need to get all components of the business growing in the US. Without exposure in unsecured credit business, it is difficult to achieve the industry level of profitability if you just take deposits and [offer] mortgages using your balance sheet. So we need to build back unsecured, bank originated [consumer] credit business in the US,” Flint added.

  • HSBC’s big push into Asia

    HSBC’s big push into Asia

    HSBC’s adjusted pre-tax profit of $6,033m for the first quarter is in many senses disappointing. It was down 3% from a year earlier and fell short of analysts’ estimates. From an Asian perspective, however, HSBC’s Q1 financial results highlight the scope of its expansion in the region – growth which has also contributed to its rising cost base. If you’re thinking about applying to HSBC in Asia, here’s what its latest numbers tell us about jobs at the bank.

    Asia generated $4,756m in adjusted profit before tax in Q1, up 8% from a year earlier. By contrast, Europe’s contribution to profit fell 72% to $222m over the same period, while North America’s declined 16% to $438m. Asia now accounts for 79% of HSBC’s profit. This suggests that the firm is doubling down on its pivot to Asia (and to China in particular), a strategy that seeks to redeploy $100bn or more of assets into the region. HSBC announced the plans in 2015, adding that it would hire 4,000 staff in the Pearl River Delta region in southern China, although it still faces strong competition from local banks there.

    HSBC is hiring investment bankers in China…

    HSBC Qianhai Securities, the first joint-venture securities company in mainland China to be majority owned by a foreign bank, has been hiring in the first quarter. HSBC made “made strategic hires in our securities joint venture in mainland China”, group chief executive John Flint, said in a statement within the bank’s financial report, without elaborating. Qianhai, which was launched in December, already has licences to offer equity and debt sponsoring and underwriting, equity research and brokerage of locally-listed securities, and domestic and cross-border M&A advisory. First quarter investment in Qianhai contributed to rising costs at HSBC, Flint said.

    HSBC is hiring more technologists, product managers, developers and content producers as it expands its digital-banking team in Hong Kong, its main digital development centre alongside London. This expansion appears to have continued into Q1. Flint said in his statement that the bank has “invested to enhance our digital capabilities in all our global businesses”.

    HSBC’s Asian private bankers are getting more productive

    HSBC’s Global Private Banking division makes up just 2% of its profits globally, but it is expanding in Asia, particularly in Hong Kong. Revenue in the division increased by $45m or 10%, “mainly in Hong Kong, as higher investment revenue reflected increased client activity, and deposit revenue increased as we benefited from wider spreads”. Although HSBC’s report doesn’t reveal regional revenue or profit figures for GPB (or other divisions), it does disclose client assets. First-quarter AUM in Asia rose 18% year-on-year to $131bn. But while rivals – from UBS to UBP – have been aggressively hiring in the sector, HSBC’s headcount of relationship managers in Asia stayed static at 470 last year, according to Asian Private Banker. The AUM increase suggest that HSBC’s existing RMs are becoming more productive.

    The first quarter was also a fruitful one for RMs working in wealth management in Asia. Their unit (which serves clients who aren’t rich enough to use the private bank and is part of HSBC’s wider Retail Banking and Wealth Management division) saw its global income rise 27% year on year to $1,829m. The increase “was primarily in investment distribution, reflecting higher sales of retail securities and mutual funds in Asia, following increased investor confidence”.

    Like their counterparts at rival Asia-focused banks Standard Chartered and DBS, Asian transaction bankers performed well at HSBC in Q1. Revenue within the Commercial Banking division increased by $0.3bn or 10%, notably in global liquidity and cash management, as HSBC “benefited from wider deposit spreads in Hong Kong and mainland China”. Credit and lending revenue also increased in Hong Kong.

  • HSBC gears for new retail banking push in the UAE

    HSBC gears for new retail banking push in the UAE

    Global banking giant HSBC, with a focus on the premium segment of the consumer banking business is looking to expand its retail lending, liabilities and wealth management business to a wider audience.

    “We are looking at the full corporate employee programmes to expand our retail business. We want to deal with payroll type solutions from both wholesale and retail side, covering liability and asset side of the business,” Marwan Hadi, head of Retail Banking and Wealth Management in the UAE, told Gulf News in an interviMajority of the bank’s retail lending is against salaries. Although the bank’s focus is on premium segment of the retail banking, in the corporate employee programme, the bank aligns its lending policies to be more inclusive. However, the bank does not insist on taking on the entire payroll from a customer acquisition point.

    “The UAE is a market where customers have wider choice. Although we become a preferred bank for a company through our corporate programme, the customers have the freedom to choose which bank they want to do business with,” said Hadi.

    HSBC sees strong potential for retail assets growth. Given the positive economic outlook, the bank sees greater growth in numbers as it gains market share in this segment. As part of its new retail expansion strategy, the bank is investing in digital solutions and frontline staff. The bank is in the process of adding more relationship managers (RMs).

    The new retail strategy revolves around the concept of taking the bank to the customers. While a part of it relates to providing appropriate digital banking delivery channels such as mobile banking and internet banking, HSBC is equipping its retail staff with most advanced digital solutions to serve their customers better.

    The bank has a network of eight branches and seven customer service units focused on commercial hubs across the country. Unlike many leading local banks that have wider branch network and still expanding, HSBC plans to reach customers wherever they are.

    Bank’s new customer acquisitions are based on corporate relationships. “Our customer acquisition numbers in the first quarter this year is much more favourable than last year. We are experiencing more than 10 per cent growth in terms of new to bank customers,” Marwan said. On the lending side, with the exception of auto loans, for all segments such as mortgages, personal loans and credit cards the bank has witnessed double digit growth so far. Hadi expects the bank to keep up the momentum through the year.

    “We don’t see any reason why this trend will not continue for the rest of the year. The International Monetary Fund (IMF) expects the UAE economy to grow at 3.5 per cent this year. Our Group is very comfortable with the growth outlook,” he said.

    In the cards business, the bank has plans to expand its product suite to complement the existing successful cash back card programme and premium offering like fully metallic black card.

    Liability focus

    For the past several years retail banking has been largely focused on assets (lending) business. Hadi expects that to change as the interest rates rise. With the rising rates, banks are likely to make more income from liabilities business (deposits).

    HSBC with its focus on the premium segment of the retail business has a strong retail deposits base. The bank is currently working on strategy to match retail asset business with its strong retail liabilities business.

    Wealth offerings

    Bank’s wealth business, focused on premium retail customers will be largely driven by growth in relationship managers as it plans to increase the number by more than 15 per cent this year.

    “We have expanded our wealth proposition with a robust investment platform offering more than 75 mutual funds. Currently, we have two GCC funds but going forward we are looking to add more regional funds in our offering,” said Hadi.

    In addition to mutual funds, the bank has fixed income products on offer and has plans to add direct equity and exchange traded funds (ETFs) in the future. The bank’s portfolio advisory service offers a goal-based investment advice directly linked to the risk tolerance levels of customers.

    Quick payments

    HSBC has a very competitive payments business in the UAE. In the foreign exchange (FX) business within the Retail Banking space, the UAE is the third largest market for HSBC Group, after UK and Hong Kong. The bank offers linked accounts for premium customers across key global corridors, allowing customers to transfer money instantly between these accounts. The bank also offers opportunity to link the HSBC accounts of family and friends globally, making fund transfers within the group quick and seamless. Both these facilities are free of charge and are completed digitally to allow improved customer experience.

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  • HSBC launches Singapore-dollar income bond fund for local retail investors

    HSBC launches Singapore-dollar income bond fund for local retail investors

    The fund will primarily invest at least 50 per cent in SGD denominated bonds issued by governments, government agencies, supranational bodies or companies that are Singapore and non-Singapore based issuers. All other investments will be hedged to SGD. The fund also invests across various countries and sectors which tend to behave differently at different market cycles enabling diversification.

    Puneet Chaddha, CEO, Southeast Asia, HSBC Global Asset Management, said: “We launched the fund because our retail customers want to grow their capital faster than the average savings rate but in a way that’s risk weighted and diversified. This fund gives them access to growth with limited downside exposure.”

    “Being located in the heart of Asia, Singaporeans understand the underlying economic growth of the region. Moreover, the diverse nature of the fund’s investment allocation across a multitude of Asian countries and sectors will provide confidence in the growth potential but with the added assurance of minimizing currency risk.”

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  • HSBC names new retail head

    HSBC names new retail head

    HSBC Holdings has named Charlie Nunn as chief executive of its retail banking and wealth management business to replace John Flint, who will take over as the British lender’s overall chief executive.

    Nunn joined the bank in 2011 and is already acting head of HSBC’s retail banking and wealth management business.

    In Hong Kong, Kerry Properties (0683) announced that Wong Siu Kong, 66, will relinquish his position as chief executive and will remain chairman and an executive director.

    Wong has been the chairman of the board since 2013 and chief executive since 2015.

    Ho Shut Kan, 69, who has been an executive director of the company since 1998, will be re-designated chief executive and will become a member of the remuneration committee and the nomination committee of the company. He is also a director of Kerry Holdings Limited, the controlling shareholder of the company, and a director of China World Trade Center Co.

    TV operator i-Cable Communications (1097) announced that Irene Leung Shuk-yee has been named chief operating officer with effect from tomorrow.

    The 48-year-old is an experienced senior manager in the telecommunications industry, having developed her expertise in fixed and mobile telecom services, i-Cable said in a filing to the Hong Kong stock exchange.

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  • Rosy results picture for HSBC

    Rosy results picture for HSBC

    HSBC Holdings releases its annual results this week and many investment houses seem positive.

    Goldman Sachs expects the total amount of share buybacks of the banking group to hit US$3 billion (HK$23.4 billion) this year and the dividend payout to be maintained at 51 US cents per share.

    The conglomerate has had three public repurchases in the past, ranging from US$1 billion to US$2.5 billion.

    It will record a US$3.7 billion profit before tax for the fourth quarter of the last financial year while the average market expectation is US$3.9 billion, up 49 percent from its result last year, Goldman Sachs added.

    Investors will tend to focus on the company’s retail business performance in Hong Kong in the fourth quarter last year when the local stock market surged and the interest rate grew, both of which should have benefited the HSBC’s wealth management and insurance business, Goldman Sachs said.

    According to the prediction made by analysts from Bloomberg, the company should see approximately US$20.35 billion annual adjusted profit before tax, growing 5.4 percent year on year. Internal securities and analysts from HSBC are more positive, forecasting a 10.4 percent annual growth in adjusted profit before tax to US$21.31 billion and a 7.6 times year on year gain in net profit to US$11.33 billion.

    However, China Goldjoy Asset Management managing director Matthew Kwok is not expecting too many surprises.

    He said the banking group is unlikely to have a large growth in net profit, plus the switch of management should drag the public attention to new strategy developments, though he agreed that HSBC has sufficient capital for share buybacks.

    Stuart Gulliver, chief executive of HSBC, will leave the position this week after the results’ announcement.

    Recently, he reportedly said the banking giant is unlikely to exercise any spinoff after many years of business restructuring.

    For a long time English politicians have been critical of HSBC for its merger and acquisitions in earlier years “have led the company to the stage of being hard to manage,” but now Gulliver said such concerns have faded.

    With the hope of an excellent result, the banking group’s stock price rose in Hong Kong before the Lunar New Year holiday and surged to HK$83.55 on the last trading day.

    Last October, HSBC released its third quarter result and signaled its pivot to Asia was paying rich dividends as quarterly profits leaped fivefold, and that it will continue placing strong investments in the mainland over next few years.

    The bank makes more than half of its profits in Asia, and its regional pivot is centered around the Pearl River Delta with plans to bolster its retail and wealth management business.

    Back then, Gulliver said that the group expected sustainable profit efficiency from the region.

  • Malaysia continues to attract expats from Europe and Eastern Asia region

    Malaysia continues to attract expats from Europe and Eastern Asia region

    HSBC Bank Malaysia said Malaysia continues to attract expats particularly from Europe and Eastern Asia regions.

    Country head, retail banking and wealth management, Lim Eng Seong said one of the reasons why expats love settling down here are the friendly nature of the Malaysians.

    “Looking for accommodation, organising healthcare and schooling are all easy to do in Malaysia, hence the plus points for expats to move here,” he said in a statement.

    Based on HSBC’s Expat Explorer survey conducted last year, he said Asia continues to provide promising economic prospects and improved quality of life that appeal to professionals and entrepreneurs both from within the region and across the globe.

    Now in its 10th year, the HSBC Expat Explorer survey is the world’s largest and longest running study of expats life, involving over 27,500 expats about their experience abroad.

    61 per cent expat experience in Malaysia found it was easier to make friends. In terms of active social life, 44 per cent noted they have better social lives now than they did at home compared to 31 per cent of all expats around the world and 40 per cent regionally.

    The survey revealed that Malaysia offers simplicity and smooth transition for expats in finding accommodation (61 per cent), organising healthcare (54 per cent) and arranging childcare and schooling (52 per cent).

    “In fact, once expats settle down, life continues to be positive for most of them where more than half (55 per cent) live in a better property than they would have had in their home country.”

    The survey also found that life abroad typically increases expats’ income by 25 per cent, with expats earning just under US$100,000 a year on average.

    “Far from compromising their wellbeing, expats seem to find the right balance. 41 per cent expats adopt a more positive outlook on life after moving abroad, with 44 per cent becoming more physically active.”

    The surveyed highlighted that expats in Asia said they have experienced an uplift in income of at least 10 per cent, including Australia, China, Hong Kong, India, Indonesia, Malaysia and New Zealand.

    Lim said Asia continues to draw expats from all over the globe for its buoyant economic prospects.

    “We still see a significant proportion of expats coming from Europe and North America but also a robust pool of Asian expats working in Singapore, Malaysia, Indonesia and Greater China – all trying to capture opportunities from the region’s fast-growing consumer services sector, increased tech and digital focus and infrastructure push,” he added.

    He pointed out the continued growth in China and Asean would require a diverse mix of talent from people who are internationally mobile.

    Lim said expats’ financial needs are more complex, citing that managing accounts in multiple markets and currencies, health and protection cover, as well as saving and investing for education, retirement and property aspirations are key aspects of their holistic financial plan.

    “Wherever they live, expats should seek financial advice from a trusted provider who can help them manage their more complex financial affairs,” he said.

  • HSBC profits up five-fold in third quarter

    HSBC profits up five-fold in third quarter

    ‘Our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong.’

    HSBC said Monday that profits were up more than five-fold in the third quarter as its Asia business drives higher returns.

    Reported pre-tax profit jumped to $4.6 billion in the three months to the end of September, compared with $843 million over the same period in 2016.

    The Asia-focused banking giant has been on a recovery drive over the past two years to streamline the business and slash costs, and has laid off tens of thousands of staff.

    Shares were up 1.1 percent at HK$77.95 ($9.99) by lunch, shortly after the results were released.

    Chief executive Stuart Gulliver said the bank had “maintained good momentum in the third quarter”, with higher revenue across its main global businesses.

    “Our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong,” he added.

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  • HSBC debuts mobile stock app

    HSBC debuts mobile stock app

    HSBC has introduced a new stock trading mobile app for both Android and iOS to help Hong Kong customers more easily trade Hong Kong, China A and US stocks.

    The HSBC HK Easy Invest standalone stock trading app includes new features including a one-screen quick buy function, interactive charts, a sector heat map and tailored news.

    Customers can access the app using their existing HSBC Personal Internet Banking Details or Touch ID fingerprint authentication for Apple users. The app also employs several industry-standard security measures for further protection.

    To promote the new app, HSBC is offering new users a HK$100 brokerage fee rebate on customers’ first trade using the system until November 30.

    “With changing customer behaviour and increasing demand for faster and more convenient banking services, we are expanding our digital capabilities to better meet customers’ needs,” HSBC head of retail banking and wealth management for Hong Kong Greg Hingston said.

    “HSBC HK Easy Invest is a smart and powerful tool that is easy to use, fast and secure, helping us support our customers as they manage their wealth.”

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  • HSBC ‘back in growth mode’ in Singapore

    HSBC ‘back in growth mode’ in Singapore

    British bank HSBC is now “back in growth mode” in Singapore after investing heavily in turning around revenue and profitability, said a top executive.

    Despite a fiercely competitive retail market, the bank has high hopes for its business here, said Mr Anurag Mathur, head of retail banking and wealth management at HSBC Bank (Singapore), who has been in the role for a year.

    He told recently: “Customers are also sophisticated (here), but that’s good as it encourages innovation and we’re often at the cutting edge in Singapore, where some of the things piloted here – and hopefully, increasingly developed here – can then be exported elsewhere in HSBC globally.”

    The bank has “spent quite a bit of time and investment in incorporating the company here”, said Mr Mathur, referring to its move last year to set up a local subsidiary for the retail and wealth business.

    “As part of that, we’ve also upgraded our core banking platforms and infrastructure, such as upgrading branches and opening new ones in the last few years, and improving our products and digital capabilities.”

    While Mr Mathur was unable to give specific numbers, recent data from the bank showed it has spent more than US$1 billion (S$1.4 billion) on its global digital investment since 2015.

    HSBC has 11 branches and about 1,000 employees under the retail banking and wealth management business here.

    Competition is particularly high here now, evident from moves by financial institutions here like DBS Bank, which acquired ANZ’s wealth management and retail banking business in five markets in Asia last October.

    Standard Chartered Bank for its part is chasing the silver dollar in Singapore with the release last month of a new offering for only those aged 55 and older, for instance.

    Customers of HSBC’s retail banking and wealth management unit are typically those with a minimum of $200,000 with the bank, be it through deposits, or investments, among other things – and that is where growth is for the bank too, said Mr Mathur.

    “In that space, we see Singapore continuing to be a growth hub. Wealth management is a key area of growth. The macro conditions are there.

    “Singaporeans obviously invest here, but people from around the world, particularly Asia, also like to invest here. According to the BCG wealth report of 2016, offshore wealth booked in Singapore is projected to grow at roughly 10 per cent annually through 2020.”

    He noted that HSBC is positioned to capture this segment because of several factors such as its international network, its “insurance and asset-management support pillars on the product side and a strong offshore base”.

    And almost a third of the mass affluent market in Singapore has an HSBC relationship – be it with a banking product or service.

    “In the last five years or so, we’ve seen our deposit balances in current and savings accounts grow at double digits, which is a strong and healthy indicator. Personal loans have grown by double digits in the last four to five years,” said Mr Mathur.

    While other bankers might say retail banking is surely a local business, HSBC looks at clients from a different point of view.

    “What our HSBC Premier customers find is that they can open accounts with us in multiple countries where they have property, investment or worked.”

    The bank has a feature dubbed “global view, global transfer” that lets clients access “all accounts on one screen”.

    Mr Mathur said this appeals to t Singapore’s expatriate population as they have banking relationships outside Singapore as well.

    He noted: “And almost all Singaporeans are international in some shape or form.

    “For instance, some reports show 95 per cent of them travel at least once a year, so they find the international offers we have on our credit cards powerful.

    “We believe Singaporeans will increasingly be international, in terms of where they study, do business, even where they invest. Our strengths are uniquely positioned to help them in that space.”

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  • HSBC profits up in first half of 2017

    HSBC profits up in first half of 2017

    The Asia-focused giant has been on a recovery drive over the past two years to streamline the business and slash costs, and has laid off tens of thousands of staff.

    HSBC said profits were up Monday in the first half of the year in what it called an “excellent” result after a turbulent 2016.

    Reported pre-tax profit for the six months to June rose five percent to $10.2 billion compared with $9.7 billion for the same period last year.

    HSBC also announced a share buyback of up to $2 billion, expected to be completed in the second half of the year.

    Shares were up 2.77 percent at HK$78.55 ($10.06) in early afternoon trading in Hong Kong Monday.

    The half-year results showed operating expenses dropped 12 percent to $16.4 billion, partly stemming from a sell-off of its Brazil operations.

    Chairman Douglas Flint described the performance as “extremely pleasing”.

    Flint said there were still uncertainties due to increasing geopolitical tensions and “ambiguous predictions” around Britain’s future relationship with the European Union post-Brexit, but described HSBC’s performance as resilient.

    Analysts said the results had outstripped predictions.

    “HSBC’s earnings are definitely better than market expectations,” said Dickie Wong of Hong Kong-based Kingston Securities.

    He described the firm as in “very good shape” after wide-ranging restructuring programmes following the global financial crisis in 2008.

    Net profit for the first half of the year rose 10 percent to $6.99 billion from $6.36 billion for the same period in 2016.

    Pre-tax profits for the second quarter rose $1.7 billion to $5.3 billion year on year, beating Bloomberg analysts’ estimates, which had averaged out at a $4.6 billion forecast.

    HSBC announced the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver, following a massive drop in 2016 profits.

    British businessman Mark Tucker, currently group chief executive and president of insurance group AIA, will take over from Flint in October.

    Gulliver has said he will step down in 2018.

    Gulliver and Flint were grilled by British lawmakers in 2015 and apologised for “unacceptable” failings at HSBC’s Swiss division following allegations the unit helped rich clients hide billions of dollars from the taxman.

    HSBC was one of six major U.S. and European banks that were fined a total of $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

    It was also fined $1.92 billion by U.S. prosecutors in 2012 to settle allegations that it failed to enforce anti-money laundering rules exposing it to exploitation by drug cartels and terrorist organisations.

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  • Banks are closing branches all over the world, but why not in Hong Kong?

    Banks are closing branches all over the world, but why not in Hong Kong?

    Retail banking in Hong Kong seems resilient if you look at the number of outlets. Elsewhere in the world, bank branches have been closing; in Hong Kong, by and large, they have stayed open.

    HSBC will have halved its UK presence compared to 2011 by the end of this year, but a spokesman for the bank said in January that there was no programme of branch closures in Hong Kong

    Meanwhile, earlier this month, Citi announced that it would close 80 per cent of its branches in Korea, a move that has not been replicated in Hong Kong to anywhere near the same extent. In both cases the move towards digitisation was given as a reason.

    The slower take up of digital services by Hong Kong residents is at least part of the reason why there have not been similar closures in Hong Kong.

    “While we see that a growing number of basic transactions like payments are shifting to online and mobile channels, our customers continue to use branches for wealth management and mortgage services which need more personalised support,” said Greg Hingston, HSBC’s head of retail banking and wealth management Hong Kong.

    “Also there are still segments of the population that don’t use digital banking and … we continue to invest in outlets to serve these customers.” This has had positive consequences for employment in Hong Kong.

    “In the Netherlands, ING laid off 1,000 staff as they moved to more digital operations. Because there has not been the same take up of digital in Hong Kong, we have not seen any significant decline in branch headcount,” said Maggie Li, associate director of banking and financial services at Randstad Hong Kong.

    “In fact at the moment in Hong Kong digitisation means that banks are hiring more staff as they adjust to the changes.”

    However, there are reasons for branches remaining open in Hong Kong above the digital dimension.

    “In Hong Kong it is also important to note that the degree of customer account concentration per branch is very high and our network is very productive, unlike other markets where [it] is much lower,” said Hingston.

    Hong Kong’s sky high housing prices are a factor in this too.

    “Mortgages in Hong Kong are much larger than mortgages elsewhere, and if a bank were to close branches, losing a small fraction of this business would still be a significant sum,” said Keith Pogson, senior partner for financial services at EY.

    Branch closures have been seen in less profitable areas, and last year, BEA closed all 22 branches of its East Asia Securities outlets.

    Customer behaviour is also playing a role.

    “In Hong Kong when customers are choosing a bank, the convenience of its location – usually how close it is to their place of work rather than where they live – is an important aspect, and so that is another reason why branches are staying open,” said Pogson.

    Hong Kong’s banking regulator is also keen for banks to maintain a physical presence.

    “The HKMA attaches great importance to the accessibility of basic banking services to the general public, and has been encouraging the banking industry to put the spirit of financial inclusion into practice when developing their banking networks,” a HKMA spokeswoman said.

    The spokeswoman added that there were even plans afoot for more bank branches to open. “Three note-issuing banks and five retail banks plan to open about 10 branches and deploy one mobile branch in the next 12 months or so to provide basic banking services for the residents in remote areas and public housing estates,” she said.

    Branches are becoming more about selling additional services to clients, and not just offering transactions

    Keith Pogson, senior partner for financial services at EY

    Nonetheless, bank branches in Hong Kong are starting to change.

    “Branches are becoming more about selling additional services to clients, and not just offering transactions,” said Pogson.

    “This means that there has been some change in the people employed in branches, as banks look to raise branch staff’s capabilities to offer more.”

    There are also now indications that banks are starting to adapt their offerings, and a number are exploring wholly digital branches.

    Other adaptations may even involve some closures or “rationalisations”.

    “Going forward, Bank of China Hong Kong will continue to explore the feasibility of using innovative forms of banking service delivery channels and to rationalise its branch network to provide customers with banking convenience beyond conventional branch services,” said a spokeswoman for the bank.

    As Hong Kong consumers gradually become more willing to use technology, and technology provided by the banks improves, then the pace of such changes may accelerate.

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