HSBC grooms well-connected bankers to drive China expansionBusiness | 13 Jan 2021 10:49 am
As HSBC Holdings pins its future on China, Europe’s largest bank is grooming a set of well-connected bankers to navigate its fraught relationship with Beijing in the long run, Bloomberg reports.
David Liao and Mark Yunfeng Wang, heads of Asia Pacific global banking and its China operations, respectively, are among a handful of contenders in the running to steer HSBC’s expansion in the crucial mainland and Hong Kong markets, according to people familiar with the matter.
Both are prominent in conversations about HSBC’s future as the lender kicks off an informal search to identify a successor for Peter Wong, its top Asia executive, they said, asking not to be named discussing private matters.
Wong has been pivotal to restoring the British bank’s standing in China after it faced censure for its role in a U.S. probe of Huawei Technologies and to helping it maneuver around fraying ties between the world’s two superpowers.
The 69-year-old Wong, who’s viewed as difficult to replace and has previously extended his tenure, is mentoring both Liao, 48, and Wang, 55, to strengthen the China bench ahead of his eventual retirement, the people said. The lender is casting a wide net both within its ranks and beyond, one of them said.
HSBC declined to comment.
A seamless transition is crucial for the 156-year-old bank, which is hearkening back to its roots with a historical restructuring that will steer billions of dollars in capital toward Asia, while shrinking or exiting unprofitable U.S. and European operations.
“It’s important to have a local as the chief in the Asia region, particularly so in China with a complex culture,” said Tom Kirchmaier a professor at the Centre of Economic Performance at the London School of Economics. “Banking is also so much about networks that are much harder to build as a foreigner.”
Wong, a member of the Chinese People’s Political Consultative Conference, the political-advisory body, nurtured relationships in Beijing during his five years as general manager of the bank’s China business.
Since taking on HSBC’s top position in Asia Pacific in 2010, he’s lobbied for an expansion in the Greater Bay Area and for maintaining a stake in Bank of Communications as other global banks retreated. Souring relations with China since mid-2019 made Wong’s role more critical. He’s pushed headquarters for a faster response to Beijing’s concerns and was the man rolled out to publicly endorse the security law that China imposed on Hong Kong last year.
The situation is pressing as Chairman Mark Tucker, who manages relations with Beijing alongside Wong, has his contract coming up for renewal.
Tucker has close ties to Hong Kong and China since his tenure at Prudential Plc, and flew to Beijing around four times a year before the coronavirus pandemic hit, one of the people said.
Liao, head of the Asia-Pacific global banking unit since April, previously oversaw China for five years, gaining experience in dealing with officials and regulators. But being born in Hong Kong and educated in the U.K., he tended to be rigid when meeting with Chinese officials, said the people.
Still, he was popular among investors and analysts covering HSBC with his fluent English and deep knowledge of Chinese markets, said the people. He’s also close to Chief Executive Officer Noel Quinn and HSBC board member Laura Cha, who was formerly a vice chairman of China Securities Regulatory Commission, they said.
Liao now helps lead a division that spans everything from debt capital raising to initial public offerings. The Asian unit accounted for more than 80 percent of the total adjusted profit of HSBC’s global banking and markets in the first nine months of the year.
Raised in Nanjing, a city just north of Shanghai, Wang is seen as being more at ease with officials and state-owned enterprises and better able to navigate China’s opaque regulatory and political environment. Elevated to China CEO last year, he has a personable style and has been a more public face for the bank, a person familiar said.
However, Wang has only been in his new role since about March and will need more experience before taking on further responsibility, the people said. Wang joined HSBC in 2005 and oversaw China banking and markets from June 2016. He started in foreign exchange and bond trading at the Bank of China in the late 1980s and joined Deutsche Bank AG about a decade later.
Collectively, Hong Kong and China stood for more than 90 percent of HSBC’s adjusted profit in the first nine months of 2020, but the mainland still represents a small part.
Even so, the lender that started in Hong Kong in 1865 to connect China with the world is one of the largest investors among foreign banks on the mainland with a network of about 170 outlets across more than 50 cities and about 8,000 staff.
The bank is looking to target China’s growing affluent masses and will consider acquiring or partnering with a financial technology company to roll out its digital platform, one of the people said.
At a November town hall in Hong Kong, local senior management, including Wang and Wong, underscored their commitment to the Greater Bay Area.