Date
12 December 2017
HSBC group chief executive Stuart Gulliver says the bank's move to merge Hong Kong with the Asia balance sheet will increase its efficiency in making decisions and allocating resources. Photo: Bloomberg
HSBC group chief executive Stuart Gulliver says the bank's move to merge Hong Kong with the Asia balance sheet will increase its efficiency in making decisions and allocating resources. Photo: Bloomberg

How could you do this to us, HSBC?

HSBC Holdings Plc (00005.HK) has decided to incorporate the results for Hong Kong into its overall Asia balance sheet.

While the move may enhance the bank’s operations from an accounting point of view, it certainly is not good public relations for its clients in the city who grew its business and supported it through thick and thin for all these years. When it was struggling to recover from the global financial crisis, for example, were they not the core supporters of its crucial rights issue in 2009?

Reporting its first-quarter results on Wednesday, HSBC, the largest bank in Hong Kong where it has 29,000 employees, announced that it has merged Hong Kong with its Asia balance sheet for the first time since the city’s handover in 1997.

Group chief executive Stuart Gulliver told analysts in a teleconference that the combination will help increase the bank’s efficiency in making decisions and allocating resources.

But it is inevitable that some Hong Kong people may try to relate the matter to the central government’s decision to create a separate section for Hong Kong and Macau in its 12th Five-Year Plan, which then Premier Wen Jiabao unveiled at the annual meeting of National People’s Congress in March 2011.

Creating a separate section for Hong Kong and Macau showed that the special administrative regions are being given a special priority in the country’s economic development plan among other mainland cities. From Hong Kong’s perspective, if one day Beijing merges the Hong Kong section with the one for Guangdong province, such an action obviously would not looked upon as a good omen for the Asian financial hub.

Although most individual HSBC investors in Hong Kong may care more about the dividend payout ratio than details of the bank’s performance in the city, HSBC’s latest move is likely to inspire some hard feelings toward the bank among its long-term supporters in Hong Kong.

It will also strengthen its western-bank image while undermining its Hong Kong characteristics, Bill Mak Sui-choi, associate professor of the Department of Finance and Decision Sciences at Hong Kong Baptist University, was quoted as saying in a report by Hong Kong Economic Times on Thursday.

Such move will hurt not only Hong Kong people’s feelings, but also hurt transparency and information disclosure, Mak said.

Ian Gordon, an analyst at Investec Asset Management, said the worsening performance in other Asian countries may be softened by improving figures in Hong Kong under the latest arrangement.

– Contact the reporter at [email protected]

CG

Chief reporter at EJ Insight

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