As HSBC moves to reduce costs and reverse declining profits, it says Singapore will remain one of the group’s priority markets in its pivot to Asia.
The banking giant says it plans to cut about 50,000 jobs, sell its operations in Brazil and Turkey, and have a return on equity of more than 10 per cent by 2017.
In its Tuesday investor update for 2015, HSBC also outlines a strategy to increase its presence in South-east Asia and China’s Pearl River Delta within the next 10 years.
The bank notes that Singapore is a leading financial centre in Asia. HSBC aims to “become the leading international financial services provider in Singapore” in the long term, with emphasis on Financial Institutions Group (FIG) clients and large regional and global corporates. It will locally incorporate the retail business here, focus on the affluent segment and expand its private banking business to capture cross-border wealth flows.
HSBC was one of the seven banks named by the Monetary Authority of Singapore last month as being “systemically important”, but has yet to locally incorporate its retail operations as required under the additional supervisory measures.
The bank’s Asean strategy recognises the significant growth in loans and advances in the region between 2009 and 2014. HSBC saw this rise by 15 per cent in Singapore, reaching US$32 billion last year. This is more than twice the amount in Malaysia, and compares relatively well with mainland China, which had US$38 billion.
Hong Kong loans and advances grew 17 per cent to reach US$214 billion.
HSBC is among the top five banks in Singapore, based on market share in deposits and loans and advances to customers, with a loan market share of 3.6 per cent. In the past year, it opened two local branches in a bid to boost its retail business, bringing the total count to 11.
HSBC would have to compete with other banking leaders, including DBS and Standard Chartered, as it also aspires to be one of the top five banks in South-east Asia.
The bank highlighted its “unique position” in Asean, noting that it is the world’s third fastest-growing trade zone, and home to a large emerging middle class and some of the fastest-growing cities. HSBC has more than 180 branches in Singapore, Malaysia and Indonesia combined, and sees itself as one of the “leading foreign banks” in these priority markets.
The bank expects “significant growth opportunity” in South-east Asia, with wealth creation to grow 3.6 times by 2030.
