HSBC ups ante in Asian delta while cutting elsewhere
by Alfred Liu,
2015-09-22 06:28:00.0
HONG KONG — HSBC Holdings plans to add 4,000 jobs in China’s Pearl River Delta over the next three to four years, expanding operations in one of the country’s leading economic regions as the bank shrinks its global workforce.
Asia-Pacific CEO Peter Wong outlined the plans in an interview with the Hong Kong Economic Times, published on Monday. The hiring spree is part of a push to expand retail banking and wealth management business as CEO Stuart Gulliver shifts about $100bn of investment to the region.
Last month Mr Gulliver said that about half of $180bn to $230bn of risk-weighted assets HSBC planned to redeploy under a revised strategy would be invested in Asia. Mr Gulliver said the 4,000 new hires would amount to a 30% increase from the 13,000 now working for HSBC in the delta.
The bank plans to trim global headcount by about 50,000 over three years and reduce annual costs by up to $5bn.
HSBC is shifting investment to Asia, its best-performing region, while cutting unprofitable divisions and country units such as Brazil and Turkey. The Pearl River Delta, to the north of Hong Kong centred on the city of Guangzhou, is home to more than 40-million people.
"The suggested headcount increase appears entirely consistent with the strategic plan as described on June 9, albeit the scale of the opportunity remains dependent on the broader macroenvironment," said Ian Gordon, an analyst at Investec with a buy rating on the stock.
"It is no secret that HSBC faces a number of revenue headwinds, exacerbated by recent currency shifts, so I expect management’s focus on cost efficiency to intensify."
HSBC wanted to increase its pretax profit in the Pearl River Delta to $1bn within five years from $100m last year, Mr Wong said. Gareth Hewett, a spokesman for HSBC in Hong Kong, confirmed the report.
Hong Kong is becoming more important to HSBC as new capital regulations in Europe dent profitability: the city contributed 66% of HSBC’s first-half pretax profit in the Asia Pacific region, according to its interim report. China’s economic slowdown is intensifying and has been stoked by wild stock swings and state interventions to prop up markets.
"HSBC is probably too optimistic about the outlook for China given the country’s economic slowdown, it will see a lot of competition with domestic lenders," said Zheng Chunming, a Shanghai-based banking analyst at Capital Securities.
"Investors are concerned about China’s rising nonperforming loans and slowing economy. They’re acting cautiously when they think about investing in HSBC."
HSBC sharesrose 1.3% to 496.85p in London on Monday, paring its decline this year to 18.4%. In Hong Kong, the lender fell 0.6%.
Bloomberg
A lighting show displays the company logo of HSBC at the bank's headquarters, beside Standard Chartered Bank, right, in Hong Kong. Picture: REUTERS
HONG KONG — HSBC Holdings plans to add 4,000 jobs in China’s Pearl River Delta over the next three to four years, expanding operations in one of the country’s leading economic regions as the bank shrinks its global workforce.
Asia-Pacific CEO Peter Wong outlined the plans in an interview with the Hong Kong Economic Times, published on Monday. The hiring spree is part of a push to expand retail banking and wealth management business as CEO Stuart Gulliver shifts about $100bn of investment to the region.
Last month Mr Gulliver said that about half of $180bn to $230bn of risk-weighted assets HSBC planned to redeploy under a revised strategy would be invested in Asia. Mr Gulliver said the 4,000 new hires would amount to a 30% increase from the 13,000 now working for HSBC in the delta.
The bank plans to trim global headcount by about 50,000 over three years and reduce annual costs by up to $5bn.
HSBC is shifting investment to Asia, its best-performing region, while cutting unprofitable divisions and country units such as Brazil and Turkey. The Pearl River Delta, to the north of Hong Kong centred on the city of Guangzhou, is home to more than 40-million people.
"The suggested headcount increase appears entirely consistent with the strategic plan as described on June 9, albeit the scale of the opportunity remains dependent on the broader macroenvironment," said Ian Gordon, an analyst at Investec with a buy rating on the stock.
"It is no secret that HSBC faces a number of revenue headwinds, exacerbated by recent currency shifts, so I expect management’s focus on cost efficiency to intensify."
HSBC wanted to increase its pretax profit in the Pearl River Delta to $1bn within five years from $100m last year, Mr Wong said. Gareth Hewett, a spokesman for HSBC in Hong Kong, confirmed the report.
Hong Kong is becoming more important to HSBC as new capital regulations in Europe dent profitability: the city contributed 66% of HSBC’s first-half pretax profit in the Asia Pacific region, according to its interim report. China’s economic slowdown is intensifying and has been stoked by wild stock swings and state interventions to prop up markets.
"HSBC is probably too optimistic about the outlook for China given the country’s economic slowdown, it will see a lot of competition with domestic lenders," said Zheng Chunming, a Shanghai-based banking analyst at Capital Securities.
"Investors are concerned about China’s rising nonperforming loans and slowing economy. They’re acting cautiously when they think about investing in HSBC."
HSBC sharesrose 1.3% to 496.85p in London on Monday, paring its decline this year to 18.4%. In Hong Kong, the lender fell 0.6%.
Bloomberg
