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Tag: HSBC

  • HSBC takes the long view with Guangdong strategy

    HSBC takes the long view with Guangdong strategy

    After two years of ploughing to become a universal bank in China’s southern Guangdong province that also serves the surrounding region, there is little sign of a full yield in near sight for HSBC Holdings. But HSBC stresses that it always knew the road to harvest would be long and treacherous, and is reiterating its commitment by pumping in more resources to expand services and hiring more staff this year.

    This is despite the fact that the lender made a loss of US$72 million in retail banking and wealth management in China last year. “The [Pearl River Delta] plan is on track,” said Kevin Martin, HSBC’s Asia-Pacific head of retail banking and wealth management. “What we’ve said is that in Guangdong we want to be a full universal bank. We feel that we are able to compete on the ground there, using digital capabilities, to bank the communities in Guangzhou and Shenzhen, and also the surrounds.” In fact, it was these efforts and investments to build out the Guangdong and Pearl River Delta plan that led to the loss last year. “It [the loss] largely reflects investment,” Martin said. “If you look at the underlying HSBC business in China retail, it is profitable. But as you invest into the future, your earnings are a tail.”

    HSBC’s choice of Guangdong and the Pearl River Delta to front its China strategy is hardly surprising, given their proximity to Hong Kong, which benefits the bank as far as Chinese consumers’ recognition of the HSBC brand goes. The bank, first called Hongkong and Shanghai Bank, was established 152 years ago in Hong Kong and a month later in Shanghai.

    “Guangdong residents don’t consider us to be the Bank of China, but when they look at their international needs… they know us and that we are well placed to meet those needs. And obviously for those who come to Hong Kong regularly, it makes sense,” Martin said. In Guangdong, HSBC has expanded its premier offering to mass affluent customers, grown out its mortgage book (though this has been affected by the Guangdong government’s cooling measures) and in December last year announced it would launch credit cards.

    Martin said there were currently 150,000 HSBC credit cards in the market by the end of April, or 5 per cent of the three-million-card target it aims to issue over three to five years that he announced in December when the card was launched. Currently, 600 million to 700 million credit cards are issued in China.

  • HSBC to add up to 1000 in China staff

    HSBC to add up to 1000 in China staff

    HSBC plans to add as many as 1,000 new employees to its Chinese retail banking and wealth management arm this year, the business’s regional head said, most of them in the Pearl River Delta, the heart of the bank’s growth strategy in China.

    If that target is hit, the new additions will mean HSBC will have hired twice as many people as it did last year for this part of the business. They will join an existing team for this unit of 2,400 employees in the world’s second-largest economy.

    HSBC has made the southern Pearl River Delta region – home to 11 industrial cities that are set to fuse into one megalopolis – its focus in China, betting on its growth and its own Hong Kong heritage.

    This region already has an economy larger than Indonesia’s and is shifting from a manufacturing base to a tech powerhouse.

    But since the strategy to reinvigorate profit growth after years of restructuring was announced in 2015, China’s economic growth has slowed, delaying the bank’s plans. HSBC makes more than half of its profit in Asia, the bulk of it in Hong Kong and China.

    “As of this point, we are very pleased with the progress in the Pearl River Delta. We certainly aren’t taking any backward steps,” Kevin Martin, HSBC’s Asia Pacific head of retail banking and wealth management, told Reuters.

    HSBC’s latest numbers for China retail and wealth management business suggest growth remained strong, with its customer base as well as mortgage volume expanding by 51 percent in the Pearl River Delta last year. It issued over 100,000 credit cards since launching it in December across all cities in the Pearl River Delta and 30 other cities in the country, Martin said.

    “We have done a lot of things in the Pearl River Delta … It remains one of the key opportunities for us.”

    Of the total 2,400 staff for retail and wealth management in China, about 800 are in the Pearl River Delta, the bank said, adding 60 percent of the hiring last year was for the southern region that counts Shenzhen and Guangzhou among its biggest cities.

    HSBC Group Finance Director Iain Mackay said last month the bank’s operating profit in China in 2016 was about $200 million lower than the previous year. That was mainly due to investments to grow the Pearl River Delta business and in financial-crime risk-management standards in China, he said.

    CHINA CALLING

    The bank’s outgoing top management campaigned heavily to promote the region and its role in HSBC’s China strategy.

    Chief Executive Stuart Gulliver, took analysts and investors on a tour of its operations there a year ago, promoting the region’s role as a gateway to tech businesses like Alibaba Group Holding and Tencent Holdings as well as new start-ups.

    Although investors have supported the plan, there has been increasing concern over the last few months about risks the lender faces in its Asia “pivot” strategy, due to the sluggish pace of China’s economic recovery and the patchy pace of development in the Pearl River Delta.

    Some sectors have struggled in the face of falling exports and tighter credit conditions.

    Gulliver said in February 2016 that the bank, which is facing downward pressure on its revenue in 2017 due to regulatory costs and lower rates in Britain, planned to hire 4,000 new staff in the region over five years instead of its initial three-year target.

    But Martin brushed aside concerns that HSBC’s investment could be scaled back as China’s economic growth slows, saying the bank remained committed to the region.

    HSBC’s newly appointed chairman, Mark Tucker, has also had an intense focus on Asia, most recently as head of insurer AIA Group.

    “We will see and we have seen it already even at 6.5 percent growth rate, (there is) massive underlying growth for China,” Martin said. “Clearly there’s real upside on that for us.”

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  • HSBC closes 62 more UK branches, but all Hong Kong outlets to stay open

    HSBC closes 62 more UK branches, but all Hong Kong outlets to stay open

    HSBC is shutting 62 more British branches this year, meaning the bank will have closed 340 outlets across the country within the past two years.

    But in a divergence of strategies between two of its most significant retail banking markets, the bank said it had no such plans in Hong Kong.

    “While individual branches relocate from time-to-time, there is no programme of closures in Hong Kong,” insisted HSBC spokesperson Gareth Hewett.

    The bank has about 100 branches and more than 300 standalone express bank centres in Hong Kong. It blamed the UK closures on the changing habits of its customers, adding HSBC will still have 625 branches in the country by 2018.

    “More customers are using mobile and internet banking than ever before … and fewer people are using branches. More than 90 per cent of our interactions with customers are now through our digital channels – an increase from 80 per cent last year,” said Francesca McDonagh, HSBC’s head of retail banking and wealth management for UK and Europe.

    Last year HSBC halved its branch network in India, again citing the move to digital as an important factor in the decision.

    While the lender is pursuing a digital strategy in Hong Kong, which includes digital peer-to-peer payments systems and virtual assistants for its corporate clients, these new initiatives have not led to a need to reduce its branch network here.

    More customers are using mobile and internet banking than ever before … and fewer people are using branches. More than 90 per cent of our interactions with customers are now through our digital channels – an increase from 80 per cent last year

    Francesca McDonagh, HSBC’s head of retail banking and wealth management, UK and Europe

    Across the board, branch networks in Hong Kong have remained broadly solid, though last June Bank of East Asia said that its brokerage business, East Asia Securities, would close its 22 retail outlets.

    As has become standard practise, BEA too noted the vast the majority of its transactions were now being conducted via the internet or over the phone.

    The new closures mean HSBC has shut more branches than any other major UK high street lender, but the closures are by no means unique.

    Last week, the Yorkshire and Clydesdale bank group said that it would close 79 UK branches, and, in 2015 and 2016, more than 1,000 banks were closed across Britain according to consumer group Which?

    Dominic Hook, national officer at UK’s largest trade union Unite said in a statement: “Unite is again calling on the banking industry to rethink such branch culling exercises, which do nothing to reassure customers or staff that banking is accessible and open to all.

    “Without doubt customer service in financial services will suffer if our high streets are left with no local branches.”

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  • Greenpeace Claims HSBC Helped Financing Deforestation

    Greenpeace Claims HSBC Helped Financing Deforestation

    Greenpeace International launched a new report on Tuesday, January 17, 2017, accusing British HSBC of supporting deforestation. The report stated that British HSBC provided financial services to palm oil companies that are causing rainforest destruction and human rights abuses in Indonesia.

    The report titled “Dirty Bankers: How HSBC is financing forest destruction for palm oil“, claimed that HSBC has been involved in arranging US$16.3 billion of loans and credit facilities to six palm oil firms. In addition, the is also said to have raised US$2 billion bonds for these firms.

    The palm oil companies listed in the report are Malaysian firm IOI; Indonesian Bumitama Agri and Salim Group; Singapore incorporated Goodhope Asia; Hong Kong-based and Singapore-listed Noble Group; and Korea’s Posco Daewoo Corporation.

    Greenpeace argued that HSBC has violated its policies of responsible lending by helping to finance the above-mentioned companies.

    Annisa Rahmawati, Greenpeace Southeast Asia senior campaigner said that although HSBC claimed to be a respectable bank with responsible policies on deforestation, “somehow these fine words get forgotten when it’s time to sign the contracts.”

    Not only HSBC, the report also listed several other banks claimed to be related to case studies in the report, including Japan’s Sumitomo and Tokyo Mitsubishi banks; Singaporean bank DBS; and the Australia and New Zealand Banking Group (ANZ).

    Despite the heavy criticism, the report did acknowledge HSBC as a “relatively progressive” bank that has shown a willingness to engage with criticism, and noted that the bank has a responsibility to set high standards for the rest of the sector.

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  • Apple Pay for HSBC Cardholders in Singapore

    Apple Pay for HSBC Cardholders in Singapore

    Going digital is part of HSBC’s strategy as technology and mobility are changing how customers do banking. The customers will be given a discount for every Apple Pay transaction until Januar 15.

    HSBC Singapore is treating its HSBC Visa and MasterCard credit cardholders with Apple Pay, according to a statement sent on Monday. Customers using iPhone SE, iPhone 6 to higher versions, and Apple Watch can use Apple Pay in stores with Visa payWave or MasterCard contactless payment terminals in Singapore and overseas.

    As a kick off treat, HSBC customers will be given $5 off for every Apple Pay transaction with their HSBC credit cards, with a minimum spend of $10 per transaction. This promo will be on until January 15 next year.

    «Our findings show that awareness of contactless mobile payment is high amongst Singapore consumers (89 percent) and over half indicated interest to try this new payment method. We believe the security, privacy and convenience Apple Pay brings will appeal to all our customers, especially those who are also active users of our digital banking services,» Anurag Mathur, HSBC Singapore head of retail banking and wealth management said.

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  • HSBC to step up hiring in China

    HSBC to step up hiring in China

    HSBC Holdings plans to step up hiring in China for its retail and wealth business next year. The London-based lender is persisting with its expansion in China despite Britain’s economic slowdown and measures to stem capital outflows.

    The bank increased the number of retail bank employees in China’s Pearl River Delta by 57 per cent in the 12 months to September, according to Mr Kevin Martin, the firm’s Asia-Pacific head of retail banking and wealth management.

    The pace of hiring may accelerate next year as HSBC Holdings expands in areas like mortgages, credit cards, personal lending and wealth services in the Pearl River Delta, he said.

    “We’re exactly where we expected to be,” Mr Martin said in an interview in Hong Kong last Friday, referring to his unit’s growth in the region.

    “Historically, our customers in Shenzhen were Shenzhen-Hong Kong customers. Now the Shenzhen customers stay in Shenzhen because we’re building our local business as well as our cross-border business.”

    HSBC started its credit card business in China yesterday after it received regulatory approval to issue cards by itself. It had previously partnered Bank of Communications to do so. HSBC is seeking to issue more than 3 million cards in the short to medium term and add “a handful more” branches across China next year, Mr Martin said.

    HSBC is trying to capture business from China’s swelling ranks of affluent individuals even as economic growth slows and the authorities take steps to curb outflows of yuan from the country and cool the property market.

    Chief executive officer Stuart Gulliver said in February that HSBC will hire 4,000 employees mainly in the Pearl River Delta over five years instead of three, as a result of the economic downturn. Retail banking and wealth management accounted for 36 per cent of the bank’s Asian pretax profit in the third quarter.

    Mr Martin said: “Despite everything that’s happened, we’ve done everything we said we would. Retail business is a long-term business. We don’t make decisions based on changing regulations on the day. It’s the honest answer.”

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  • HSBC enables Apple Pay for Singapore cardholders

    HSBC enables Apple Pay for Singapore cardholders

    Customers can enjoy $5 off every transaction as a kick off promo. HSBC Singapore is treating its HSBC Visa and MasterCard credit cardholders with Apple Pay.

    Customers using iPhone SE, iPhone 6 to higher versions, and Apple Watch can use Apple Pay in stores with Visa payWave or MasterCard contactless payment terminals in Singapore and overseas.

    As a kick off treat, HSBC customers will be given $5 off for every Apple Pay transaction with their HSBC credit cards, with a minimum spend of $10 per transaction. This promo will be on until January 15 next year.

    Commenting on the launch, HSBC Singapore head of retail banking and wealth management Anurag Mathur said going digital is part of the banks strategy as technology and mobility are changing how our customers do banking.

    “Our findings show that awareness of contactless mobile payment is high amongst Singapore consumers (about 89%) and over half indicated interest to try this new payment method. We believe the security, privacy and convenience Apple Pay brings will appeal to all our customers, especially those who are also active users of our digital banking services,” he said.

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  • HSBC Amanah Malaysia appoints new CEO

    HSBC Amanah Malaysia appoints new CEO

    Arsalaan (Oz) Ahmed has been appointed as the Chief Executive Officer for HSBC Amanah Malaysia Berhad. As the CEO of HSBC Amanah Malaysia Berhad, Oz Ahmed will be leading the Islamic banking businesses for Retail, Commercial and Wholesale Banking, and reporting to the CEO of HSBC Bank Malaysia Berhad, Mukhtar Hussain.

    Before joining HSBC Amanah, Oz was appointed as the Head of Capital Financing & Financial Institutions for Barwa Bank in Doha, Qatar, where he led the development of Islamic debt capital market and wholesale banking platform.

    With 15 years of experience, Oz has distinguished himself as a thought leader in Islamic  and ethical finance and an expert in Shariah-compliant retail, corporate and investment banking. He has held a number of senior management roles with international exposure in the United Kingdom, Middle East and Malaysia.

    Commenting on his appointment, Mukhtar Hussain, CEO of HSBC Bank Malaysia Berhad, said, “Oz brings a wealth of experience vital for the growth of our Amanah business in Malaysia. As Malaysia strengthens its role as the Islamic Finance hub of Asia, it is crucial that we aid the progress with the right leadership, innovation and world class Shariah compliant products and services.”

  • Ex-UBS Executive Director Joins HSBC

    Ex-UBS Executive Director Joins HSBC

    A former Executive Director, Wealth Management at UBS, Singapore, has crossed the street to take up a senior role with rival HSBC Private Bank.

    In a statement HSBC Private Bank said: «We can confirm the appointment of Shang-Wei Chow as a Market Head, Domestic (Singapore) team at HSBC Private Bank, effective 3 November 2016. His appointment underpins our continued efforts to enhance our client servicing capabilities and deepen our engagement with clients.»

    Chow is a seasoned private banker with nearly 15 years of experience managing client relationships and wealth portfolios in Southeast Asia. As a Market Head of the Domestic team he will be responsible for new business development and deepening existing client relationships in line with HSBC’s strategy. Prior to joining the bank he was Executive Director, Wealth Management at UBS, Singapore.

    A Year of Change

    HSBC has seen numerous changes to its Singaporean private bank throughout 2016 including the departures of HSBC veterans Rob Ioannou to DBS and Michael Hua to LGT Private Bank.

    HSBC Private Bank in the city-state has also appointed several new bankers including a Head of Investment Counselling together with a new Head of Ultra High Net Worth Investment Counselling.

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  • HSBC plans to inject $1 billion into Indonesia business

    HSBC plans to inject $1 billion into Indonesia business

    HSBC plans to inject $1 billion of additional capital into its combined Indonesian business with PT Bank Ekonomi Raharja, an official at the Indonesian financial regulator, Ariastiadi, said on Thursday.

    HSBC separately said it would integrate its Indonesian business with Bank Ekonomi, but a bank spokeswoman in Indonesia declined to comment on the planned capital injection.

    The move would help to resolve a long-running issue for HSBC in Indonesia, where the government has encouraged banks in the country to operate via a single locally incorporated entity.

    Since the 2008/09 global financial crisis, local regulators have encouraged banks in their jurisdictions to incorporate themselves locally in order to make them easier to police and to ring-fence them from external shocks.

    Before the integration, HSBC operated its own branch on top of having a controlling stake in Bank Ekonomi.

    HSBC last year offered to buy out the minority shareholders of Bank Ekonomi and delist the Indonesian lender from the Jakarta stock exchange.

    Under the integration process, all the assets and liabilities of HSBC Indonesia will be transferred to the combined entity, which will be called PT Bank HSBC Indonesia, said HSBC’s Indonesian legal consultant, Kemal Siregar.

    HSBC shares were down 1 percent in London by 0940 GMT, while the benchmark FTSE 100 index () remained flat.

  • HSBC appoints new wealth chief in Singapore

    HSBC appoints new wealth chief in Singapore

    Anurag Mathur will become HSBC’s new head of retail banking and wealth management in Singapore as of mid-September.

    He will replace Matthew Colebrook, who is taking charge of the bank’s equivalent business in the Middle East.

    HSBC

    Mathur has most recently worked as head of international markets for HSBC’s retail banking and wealth management arm in Asia.

    This has seen him oversee Bangladesh, Brunei, Macau, Mauritius, New Zealand, Philippines, Sri Lanka and Vietnam.

    Mathur has most recently worked as head of international markets for HSBC’s retail banking and wealth management arm in Asia.

    This has seen him oversee Bangladesh, Brunei, Macau, Mauritius, New Zealand, Philippines, Sri Lanka and Vietnam.

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  • Hang Seng Index Registers Sharp Weekly Losses

    Hang Seng Index Registers Sharp Weekly Losses

    Hong Kong shares continued to move lower on Friday with the fifth successive daily Hang Seng retreat and sharpest weekly decline for close to three months as confidence deteriorated further.

    US equity markets were unable to make any significant impression on Thursday with marginal losses in the S&P 500 index and weakness in Asian markets. Oil prices were subjected to choppy trading conditions with slight net losses.

    There were further concerns surrounding the Chinese economic outlook with fears that stronger data in March and April would not be sustainable. Sharp declines in mainland Chinese equity markets also had an important impact in undermining Hong Kong confidence.

    Hong Kong retail sales data, released after Thursday’s market close was weaker than expected with a 9.8% annual decline in the year to March, the 13h successive decline with domestic demand subdued and weakness in international arrivals. There were some hopes that a weaker yuan in trade-weighted terms and recent dollar losses would help improve competitiveness and cushion the retail sector from further selling pressure.

    After opening significantly lower the Hang Seng index moved steadily weaker during the morning session with lows close to 20,150 ahead of the break. Buyers were unable to make any impression during the afternoon session and there was fresh selling late in the session. The index closed with a loss of 339.95 points and 1.66% at 20109.87, the weakest close since the second week of March.

    There were daily losses of over 2.00% for the finance and property sectors and the utilities sector also edged slightly lower despite gaining defensive support. HSBC and AIA dipped significantly lower during the day. The China Enterprises index fell 1.80% for the day, also the fifth successive retreat.

    Friday’s US employment data will be important for global markets with a particular focus on the dollar, which will influence regional markets next week. China’s trade and international reserves data is scheduled over the weekend, which will have an important impact on confidence surrounding the Chinese economy and equity markets with any decline in exports undermining sentiment.

    Hang Seng Daily Chart

    hangseng daily chart 06-05-16

  • HSBC expanding retail banking business in China’s Guangdong province

    HSBC expanding retail banking business in China’s Guangdong province

    HSBC, the largest bank in Europe and Hong Kong, is planning to expand its retail banking business in China’s Guangdong province in the coming years, with credit cards. securities trading and residential mortgage business in the pipeline, said Asia-Pacific chief executive Peter Wong Tung-shun.

    Wong was in Guangzhou on Wednesday morning with group chief executive Stuart Gulliver and Greater China head Helen Wong to co-host the launch ceremony of HSBC Express, the bank’s first train sponsorship programme. Under the sponsorship deal, 11 out of 22 trains between Guangzhou and Shenzhen will be named HSBC Express.

    “These trains are for mass commute. The programme aims to bring the image of HSBC to the public as we are expanding retail banking in Guangdong, which would provide huge opportunities for HSBC in the coming years,” Gulliver told the South China Morning Post at the launch ceremony.

    “While Hong Kong has 8 million customers, there are over 50 million Cantonese speakers in Guangdong province. HSBC is very strong in retail banking in Hong Kong, which is a big part of our business. Retail banking would be our important business thrust in Guangdong in the years ahead,” he said.

    HSBC now has 64 outlets in Guangdong, accounting for a third of its 177 outlets in China. The lender has traditionally focused on corporate banking in China but Gulliver said the growing wealth in Guangdong makes it the ideal place for retail banking. “On its own, the Guangdong economy is the 16th largest in the world. The middle classes are growing, and so is the demand for retail business services,” Gulliver said.

    Wong told the Post that retail expansion would include launching HSBC credit cards, which received regulatory approval last year but the launch date is yet to be confirmed.

    Securities trading is also in the pipeline. The bank has set up a joint venture with the Qianhai authorities, becoming the first foreign firm to hold a majority stake, of 51 per cent, in a securities joint venture trading stocks for customers from Qianhai special economic zone. It is to commence operation sometime this year.

    Wong said resident mortgage business is anther retail segment in demand, adding that the bank would also like to go into other types of wealth management businesses.

    “When people get wealthy, they like to buy homes. HSBC can offer mortgage and other wealth management services for these customers in Guangdong,” Wong said. “HSBC has a long history in both Hong Kong and Guangdong. We have been in Hong Kong for 150 years and set up our first office in Guangzhou in 1909. We financed Kowloon and Guangzhou railway in the old days. We are here for the long term,” Wong said.

    Gulliver said that with the many train and bridge projects linking Hong Kong with Guangdong, the interconnection between the two would be huge in the future. This is transforming the area from a low-end manufacturing centre into a high-end technology area led by Shenzhen, providing huge opportunities for HSBC.

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  • HSBC Going Solo in China Credit Cards Gives Boost to Expansion

    HSBC Going Solo in China Credit Cards Gives Boost to Expansion

    HSBC Holdings Plc winning approval to start a credit-card business in China’s $1 trillion market offers Chief Executive Officer Stuart Gulliver added flexibility in his push into the nation’s retail banking and wealth-management industries.

    The approval from Chinese authorities came as HSBC ended a card venture with Bank of Communications Co., the bank’s Asia-Pacific head Peter Wong said in a weekend interview, paving the way for the U.K. company to join Citigroup Inc. and Bank of East Asia Ltd. as the only foreign credit-card issuers on the mainland. Wong didn’t say when HSBC won the nod from regulators, or provide any specifics on how the business will be rolled out.

    Gulliver’s Asian ambitions have been dealt a setback by crashing commodity prices, a slowing Chinese economy and a pretax loss in the fourth quarter. An independent card unit in China would improve HSBC’s access to a fast-growing market that had 449 million cards on issue as of September and allow the bank to find new clients for its retail bank.

    Getting approved for its own operation in China “is a meaningful step for HSBC as it gives the bank the autonomy to run the business,” said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Research. “Since the Pearl River Delta is HSBC’s focus, having its own credit-card business can help the bank expand in the region.”

    Credit-card offerings can act as a springboard for drawing customers to other parts of the business such as private banking, Chen said. HSBC is getting a license for a planned brokerage venture with Shenzhen Qianhai Financial Holdings Co.

    The Pearl River Delta, located to the north of Hong Kong and centered around the city of Guangzhou, is home to more than 40 million people. HSBC plans to add 4,000 jobs in that area as the bank shifts about $100 billion of investment to Asia in an effort to expand retail banking and wealth management. The bank will slow the pace of thathiring amid China’s economic downturn, but HSBC won’t alter its strategy, Gulliver said last month.

    Good Relations

    While the bank has ended its card venture with Bank of Communications, HSBC intends to maintain its roughly 19 percent stake in the Chinese lender, Asia-Pacific Chief Executive Officer Wong said Saturday in an interview on the sidelines of China’s annual congress of lawmakers in Beijing.

    “We still have a lot of other initiatives” with Bank of Communications, Wong said. “We have a very good relationship.”

    HSBC’s card offerings would compete with its old venture partner, which had 40 million domestic cards as of June, while Industrial & Commercial Bank of China Ltd. had 108 million, according to their 2015 interim reports.

    The London-based company has been working with Bank of Communications, China’s fifth-largest lender by assets, since 2004 on businesses including credit cards. The Chinese bank announced the establishment of the credit-card venture — with 2.5 billion yuan of capital — in an October 2009 statement to Hong Kong’s stock exchange.

    HSBC shares in Hong Kong fell 0.3 percent on Tuesday to HK$49.50 as of 1:31 p.m. local time, compared with the benchmark Hang Seng Index’s 0.8 percent loss. The bank’s stock dropped 20 percent this year.

    The number of Chinese credit cards in circulation at the end of the third quarter had nearly doubled to 449 million since 2010, central bank data show. That total is about the same as the combined populations of the U.S. and Japan. The outstanding balance on those cards was 6.7 trillion yuan, up 26 percent from a year earlier, according to the People’s Bank of China data.

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  • HSBC sets sights on Vietnam

    HSBC sets sights on Vietnam

    HSBC Bank (Vietnam) chief executive Pham Hong Hai (right) and Kelvin Tan, chief executive of HSBC Thailand, say HSBC aims to capitalise on its presence in seven of the 10 Asean countries.

    HSBC seeks to offer a better integrated regional service with the increase of cross-border investment following the formation of the  Asean Economic Community (AEC).

    The bank in particular is looking at Vietnam, where investment is set to surge under government policies to attract foreign investment.

    Kelvin Tan, chief executive of HSBC Thailand, said the company aimed to capitalise on its presence in seven of the 10 Asean member countries. Only Myanmar, Cambodia and Laos do not have branches of HSBC.

    “We made it very clear to our investors since last year that Asean will be one of our main focuses to help HSBC’s future growth,” said Mr Tan.

    HSBC will also focus on the Pearl River Delta, which consists of Hong Kong and Guangzhou, China.

    Mr Tan said the company will enhance the connectivity between its subsidiaries in each country to serve customers better and expand business.

    “We add value to our services by offering well-connected financial services in this region.”

    When a Thai customer expresses an interest in investing in another country in which HSBC operates, the bank will refer the customer to the office in that country, which can provide local information for doing business.

    Many HSBC customers have already expanded their businesses in other countries, especially Vietnam, to tap into a bigger market as well as take advantage of low labour costs, he said. Thai investors should benefit from the cheaper labour by setting up production bases there and using Thailand as their regional headquarters, which is the policy that the Thai government is promoting.

    “Thailand is in a very strategic location for logistics and air transport so pushing the RHQ concept is a step in the right direction, but the government will also have to include stakeholders as part for this development,” said Mr Tan.

    Pham Hong Hai, chief executive of HSBC Bank (Vietnam), said Vietnam had attracted heavy investment from Asean countries over the past few years as well as from other Asian countries such as South Korea, Japan, Taiwan and China.

    Vietnam’s low labour costs and political stability are the major draws that attract a huge amount of foreign direct investment, he said. Given the low wage rate for unskilled labour, the country has attracted a lot of labour-intensive industries.

    “Cambodia, Laos and Myanmar also have cheap labour, but Vietnam has the added positive factors of political stability and good infrastructure,” said Mr Pham.

    He said the low wage rate would last for about five years.

    However, one problem that has emerged in Vietnam is a shortage of workers at management level. Mr Pham said he expected the AEC integration to attract more white-collar workers to the country.

    He said Vietnam’s ruling party just elected a new central committee, which is expected to maintain the current policies to strengthen the country’s economy.

    The policies that will be continued include privatisation of state enterprises, modernising the banking sector, enhancing the effectiveness of fiscal policy and improving the business environment, he added.

    Vietnam’s state enterprises contribute 35% of GDP. The government is due to allow private firms to gradually own bigger stakes in the enterprises in order to enhance their effectiveness.

    The government is improving Vietnam’s business environment by passing new laws that will shorten the time required to start a new business and also to obtain a licence, Mr Pham said. There there are a lot of opportunities in businesses such as logistics, retail and manufacturing, which are growing quickly.

    “When the manufacturing sector grows it is always followed by logistics services to support the industries,” he said. “We also see that the retail sector’s growing fast with Thai companies such as Central and TCC Group investing in Vietnam.”

    He said with a population of 90 million, with young people forming a large proportion, Vietnam’s demographic make-up offers great opportunities for retail businesses to benefit from their purchasing power, which will grow significantly.