HSBC, catering to China’s international push, has created a new job title within the bank: head of the Belt and Road Initiative. The Asia-focused lender has staffed the role with senior banker Mukhtar Hussain, currently chief of HSBC Malaysia.
Putting a heavy hitter in charge of coordinating efforts to tap the US$1 trillion overseas infrastructure program makes sense, while rivals have employees playing similar roles without so exalted a title.
In 2014, the bank now led by John Flint appointed a global head of yuan business development as China lobbied the International Monetary Fund to include the yuan in the reserve currency basket. In 2013 it joined the rush to publicize operations in the newly minted Shanghai Free Trade Zone.
In HSBC’s case they may have helped the bank win permits to sell offshore yuan-related services, and to launch China’s first foreign majority-owned securities joint venture in 2017.
The bank sees the Belt and Road Initiative as a genuine opportunity, as it proposes to drive Chinese capital into some of the riskiest — but potentially higher return — corners of Asia.
HSBC also said it will seek to cut internal bureaucracy and expand investment in China’s southern region to the rest of the country, in the first hints of the strategy to be pursued by its new leadership duo.
Mark Tucker, the bank’s first externally appointed chairman, told analysts and investors that trimming the bank’s bloated governance structure was one of his top priorities.
Tucker, who took over as chairman last October, has already cut the lender’s board from over 20 people down to 14 and plans to slash more committees and processes, according to analysts.
HSBC said earlier it would hire 4,000 new staff and invest billions to make the Pearl River Delta its gateway to the rest of the country, a retail and corporate banking push that bet on a tech boom, infrastructure spending and a growing middle class.
But the bank’s profits on the mainland’s retail banking in 2017 fell by 7 percent compared with a year earlier.
Chinese regulations that stipulate customers must visit a branch to open an account have slowed HSBC’s technology-based push, analysts at Keefe, Bruyette & Woods said, since the lender only has 227 outlets in China versus local banks that have thousands each.
Tucker’s presentation gave the clearest indication yet that HSBC’s new management team will intensify its focus on China, betting on the country’s economic growth to bolster profits that have sagged in recent years amid low global interest rates, restructuring costs and ever-tighter regulation.
Tucker said investors would get a fuller picture of CEO Flint’s new strategy before the bank announces its first-half results in July.(SD-Agencies)