HSBC moving top trio to HK in Asia pivot

Business | Bloomberg 22 Feb 2021

HSBC (0005) is considering the return of some global leaders to the bank's original hometown, reinforcing Asia's role as its center of gravity.

A cadre of senior executives is set to relocate in coming months to Hong Kong from HSBC's Canary Wharf headquarters, say people familiar with the plans, as Europe's biggest bank pares its global ambitions.

Chief executive officer Noel Quinn will begin marketing what's known internally as the "pivot to Asia" tomorrow when he announces 2020 earnings.

Moving the trio - Nuno Matos, chief executive of wealth and personal banking; Greg Guyett, co-head of global banking and markets, and Barry O'Byrne, chief executive of global commercial banking - would mean businesses responsible in 2019 for 95 percent of net revenue will be run out of Hong Kong.

The coming reset comes just 12 months after an overhaul that called for cutting 35,000 jobs, about 15 percent of the total, over three years. But chairman Mark Tucker told the Asian Financial Forum conference in January that the pandemic has upended those plans. "Economic realities mean that what we were planning to do in February we need to be even more urgent in doing," Tucker said.

HSBC will probably report pretax adjusted profits fell to US$11.7 billion (HK$91.26 billion) in 2020, close to half of 2019, largely driven by soaring bad debt charges amid the pandemic, according to the average of 19 forecasts on the bank's website. Its shares, which tumbled last year, have gained about 11 percent so far in 2021, though they have lagged rivals such as JPMorgan Chase and Banco Santander.

"The potential at HSBC is from simplification, de-duplication, and increased digitization," said Edward Firth, a banking analyst at Keefe, Bruyette & Woods. "That, to me, is the opportunity, rather more than any 'pivot' to Asia or some other such strategic reset."

Cost-cutting aside, Quinn told top managers at an internal presentation this month that investment will focus on Asia, as well as the UK and the Middle East.

Seeking avenues for growth, Quinn said the bank wants to become a "market leader" in wealth management. It's now a relative minnow in the business compared to some of its international peers. While HSBC's private bank manages less than US$400 billion of client assets, UBS, the world's largest wealth manager, looks after customer funds totaling about US$2.6 trillion.

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