HSBC to Merge Singapore Units, Says Hong Kong Keeps Asia Control
Asia-Pacific co-chief Surendra Rosha says the Singapore consolidation will leave regional banking operations owned and managed by The Hongkong and Shanghai Banking Corporation.
HSBC (0005) will combine its two Singapore banking entities into one, a senior executive confirmed on Thursday (Nov. 12). He also said every one of the bank's Asia-Pacific banking units stays owned and run from Hong Kong.
The confirmation came hours after Bloomberg News reported a wider review. Citing people familiar with the matter, it said the options included moving other regional operations under the Singapore subsidiary. The report reopened speculation that HSBC was trying to reduce its reliance on China.
Surendra Rosha, HSBC's co-chief executive for Asia and the Middle East, said all Asia-Pacific banking entities remained under the ownership and management of The Hongkong and Shanghai Banking Corporation, the subsidiary head-officed in Hong Kong. There was "no plan to make any changes to this," he said.
The confirmed change is narrow. In Singapore, HSBC runs a locally incorporated subsidiary, HSBC Bank (Singapore), which took over retail banking and wealth management in May 2016. It also runs a separate branch of the Hong Kong-based parent. Rosha said putting the two together would let the bank serve clients from a single platform. He gave no timetable.
HSBC has used this denial before. Bloomberg first reported the Singapore consolidation in August. At the time, an HSBC spokesperson said the entities sat under the Hong Kong subsidiary's "ownership, management and resolution structure." Thursday's statement, as reported, did not mention resolution. That is the framework that decides which entity regulators would take over if the bank failed.
The two cities are far apart in size. Hong Kong produced US$7.8 billion of pretax profit in the first half, about 40% of the group total. Singapore produced US$774 million, or 4%. HSBC employs more than 30,000 people in Hong Kong and about 3,600 in Singapore.
Even so, Singapore has been getting the new investment. In July, HSBC said it would hire 100 wealth managers and 100 AI specialists there. In October, media reports said the Hong Kong Monetary Authority had asked why HSBC chose Singapore over Hong Kong for its global AI centre. The HKMA said it does not comment on day-to-day conversations with banks.
Under the structure Rosha described, the merged Singapore entity would still sit below the Hong Kong subsidiary. According to Bloomberg's sources, that arrangement is the thing HSBC has been weighing whether to change.