People are lining up to buy HSBC’s commemorative banknotes in honor of its 150th anniversary.
These are probably the same people who are first to shore up the stock when it wobbles. They are mostly older folk who have a longer history or relationship with the bank.
The question is why do Hongkongers love HSBC so much?
Yes, it is Hong Kong’s No. 1 bank but it is also among the most expensive to do business with — and not the most trustworthy.
Your saving hardly grows no matter how much its bottom line swells and you’re probably paying more these days for fewer services.
Lately, HSBC has been in the news for the wrong reasons.
Shortly before its results announcement last month, it was reported that its chief executive, Stuart Gulliver, had stashed millions in a Swiss tax shelter.
His predecessor and former HSBC chairman Stephen Green is facing a British parliamentary inquiry into allegations HSBC helped rich people avoid taxes.
The bank itself has been embroiled in investigations over questionable business practices, some of which it settled for millions of dollars.
In most instances, these incidents would put out customers for whom complete trust with their bank is non-negotiable.
But judging by their response to HSBC’s special issue of HK$150 banknotes, they don’t care.
Admittedly, the commemorative banknotes have their own attraction. These are unlike commercial notes or bonds that are backed by the issuer’s resources and reputation.
People buy collectibles for their potential to run up their value over time.
But why HSBC banknotes in particular? For novelty? Hardly.
HSBC is not the first Hong Kong lender to issue a HK$150 banknote. Standard Chartered (02888.HK) did it in 2009 to mark its 150th birthday, calling the issue a “world first”.
It’s not for the hype either. The frenzy surrounding the HSBC banknote is nowhere near that of the commemorative issue for the 2008 Beijing Olympics by Bank of China (Hong Kong) (02388.HK).
The answer is two words: Britain and China.
HSBC is such an embodiment of the best British heritage and of the golden age in the 1970s and 1980s that Hong Kong people are nostalgic about it.
It was a period that most symbolized a hardworking, innovative and highly entrepreneurial generation — a time when HSBC grew from a local lender to a global giant.
People became mesmerized by the HSBC story and bought into it with their money. In return, they received handsome dividends and a share of the pride in the brand.
Those days are gone but hardly forgotten.
When China Construction Bank (00939.HK) listed in Hong Kong in 2005, it marked the rise of Chinese banks in Hong Kong and around the world.
Today, mainland lenders are established in what used to be HSBC’s playground so expansively that they have changed the whole neighborhood.
But there will always be die-hard fans of HSBC. A friend of mine, for instance, has five HSBC credit cards and none from other banks. He probably has an HSBC-only ATM card.
People with longer memories probably remember when HSBC was called Hong Kong and Shanghai Bank evocative of a China that was better known then as Hong Kong’s vast hinterland.
If there are not enough reasons in Hong Kong to drive traffic to the HSBC anniversary banknote, there’s more than enough to go around in the mainland.
Note that the issue is open to all comers — there’s no need to provide proof of address or declare your nationality — which means Chinese speculators are probably in the mix right now.
Taobao, Alibaba’s online platform, is quoting the banknote at up to 65 percent more than the HSBC price, which gives us an idea of speculative demand in the mainland.
Chinese buyers know that because it’s an HSBC banknote, they could sell it back to the bank’s die-hard fans in the future and make a killing.
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