Money
HSBC extends network in China with more staff
By Cai Jing (China Daily)
Updated: 2011-05-18 10:45
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Expansion plan includes new outlets in cities and rural areas
BEIJING - HSBC Holdings PLC, Europe's biggest lender, aims to add at least 500 employees in the Chinese mainland annually as it further extends its network, said a senior executive on Tuesday.
"We still see an economic growth rate of not less than 8 percent and a very strong momentum for business growth in China," said Peter Wong, chief executive of Hongkong and Shanghai Banking Corp Ltd, during a video news briefing on Tuesday.
The bank now employs more than 5,000 people at its Chinese outlets. It has 108 outlets in 28 cities and 16 rural banking outlets, which operate as parts of HSBC Asia in the Chinese mainland.
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The bank's expansion ambition in China is in line with the group's new strategy launched on May 11, which claimed to cut $3.5 billion cost by 2013 and refocus on high growth markets, Wong said.
"We will keep investing into this high-growth market, including boosting new hires, to accelerate our expansion in China, but we will also streamline IT system and restructure duplicated management in order to keep cost under control," he said.
Stuart Gulliver, the group chief executive, said last week that the bank plans to cut between $2.5 billion and $3.5 billion in costs by 2013 by turning around, or disposing of, some businesses.
The bank aims to reduce its cost-efficiency ratio to between 48 percent and 52 percent by 2013 from 60.9 percent in the first quarter of this year.
Its business in China will be less affected by the cost-cutting plan, and key businesses such as commercial and wholesale banking, wealth management, and retail banking, will be promoted evenly, Helen Wong, chief executive of the bank's operations in the country, told China Daily.
Peter Wong said the bank, encouraged by predictions that the combined middle-class population of India and China will exceed that of the United States by 2025, plans to provide more wealth management products in China.
He also anticipates the Chinese government will remove limits that forbid foreign banks to sell mutual funds in the domestic market in the near future, a commitment made at the recent US-China Strategic and Economic Dialogue.
"I've been thinking about it from dawn to dark," he said, adding HSBC's leadership on selling funds in the Hong Kong market will surely lay a solid foundation for a sound profit in the Chinese mainland.
In 2010, operations in China provided the bank's highest pretax profit growth (94 percent to $215 million) in Asia, followed by India, where the profit growth rate was 82 percent.
The Chinese mainland was one of the six "prioritized markets" in Asia, excluding Hong Kong, from which HSBC expected to secure higher growth. The others were Malaysia, Indonesia, Singapore, India and Australia.
It expected India, Singapore, Malaysia and Indonesia to each deliver over $1 billion in pretax profit in the medium term, joining Hong Kong and the Chinese mainland as "billion-dollar" businesses, HSBC said in a news release on Tuesday.
Globally, HSBC posted a pretax profit of $19 billion in 2010, more than double its pretax profit of $7.1 billion in 2009, cementing the bank's best performance since 2006.
"Our strategy is to be the leading international bank, concentrating on commercial and wholesale banking in globally connected markets," said Gulliver on May 11.
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