HSBC Steps Up Pivot To Asia With Jobs Moves, US Exit

HSBC is stepping up its “pivot to Asia”, moving its senior executives from London to Hong Kong, abandoning its retail banking operations in the United States and planning further expansion in Singapore.

The measures, some of which are expected to be raised in a strategic update this week, come amid mounting tensions between the west and China that have left the Hong Kong-based and UK-based bank in a state of turmoil. precarious position.

Executives who move to Hong Kong are likely to include Greg Guyett, Co-Head of Banking Services and Global Markets, Nuno Matos, Managing Director of Wealth Management and Personal Banking, and Barry O’Byrne, Managing Director of Global Commercial Bank, according to matter.

The relocation of the trio would mean that the business divisions that account for almost all of HSBC’s global revenue will be managed from Hong Kong. Staff moves, first reported by Bloomberg, are dependent on regulatory approval, according to a person close to the bank. HSBC declined to comment.

“The goal is to have more people in Asia to seize the business opportunity there,” said a senior bank official. 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 severely criticized by UK MPs and US politicians for approving a controversial Beijing-imposed national security law on Hong Kong and for shutting down pro-democracy activists.

Meanwhile, HSBC has come under fire from Chinese state media after providing information to US prosecutors that led to the arrest of a top executive at Chinese telecommunications group Huawei. However, Carrie Lam, managing director of Hong Kong, has praised the bank in recent weeks, saying she “would like” HSBC to expand in the city.

“Mark Tucker’s work is 80% political and 20% commercial 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 of consumer banking in the United States after concluding that it cannot overthrow the ailing unit, some people have said.

The exit from the US retail network of 150 branches would mark the end of the lender’s 40-year attempt to run a full-service bank in America. The division has been in deficit for three years.

Besides China, HSBC also wants to expand into other fast-growing markets including Singapore and India, the bank official said. Having been courted for years by local authorities, HSBC is laying the groundwork for an acquisition in Singapore in the future, although that won’t be part of Tuesday’s update.

Investor pressure for more sweeping changes increased as the bank’s stocks underperformed their peers. HSBC stock has fallen 43% since Mark Tucker took over as chairman in October 2017. Noel Quinn was appointed chief executive last March after several months as interim chief executive.

HSBC is also facing pressure from senior executives who are willing to lower their annual bonuses when they announce this week. Like many lenders, HSBC suffered a sharp drop in profits in 2020 due to a surge in bad debt charges during the Covid-19 pandemic and a decline in customer activity.

As part of its strategy update this week, the bank is also expected to deepen cost-cutting measures, accelerate plans to simplify its bureaucratic organizational structure and take stock of the sale of its French retail network. 200 branches.

These measures aim to galvanize an overhaul effort announced only last February to redeploy more than $ 100 billion in capital in Asia and cut 35,000 jobs.

“Economic realities mean that what we were planning to do in February [2020] we need to be even more urgent to do, ”Tucker told the Asian Financial Forum last month. He said the bank needed to “pick up the pace, increase the intensity and increase delivery.”

Quinn is also in the process of identifying a new senior executive in Asia who will play a key role in the bank’s closer relationship with China ahead of the retirement of Peter Wong, who served as chief executive of the region for a decade.

Wong, who is 69 years old and is a member of a political advisory body of the Communist Party of China, played a key role in easing tensions between the bank and Beijing over his role in the arrest of Huawei executive Meng Wanzhou .

Potential candidates to replace him include David Liao, head of the Asia-Pacific World Bank, Mark Wang, head of China, and Louisa Cheang, managing director of Hang Seng Bank, in which HSBC has a controlling stake, according to two people. close to the file. .