HSBC boosts China connection

PUBLISHED : Thursday, 23 March, 2006, 12:00am
UPDATED : Thursday, 23 March, 2006, 12:00am

Mainland listing a possibility as bank deepens ties with Bocom, adds staff and expands branch network

HSBC has mapped out a three-year blueprint with Bank of Communications, China's fifth-largest lender, in which it has a 19.9 per cent stake, to further develop joint business on the mainland, according to executive director Peter Wong Tong-shun.

Mr Wong also spoke yesterday of the possibility of HSBC listing on the mainland.

'If the economy maintains its growth rate of 8 per cent to 9 per cent for the next one or two decades, there's a possibility [of listing], but we have no immediate plans,' he said. 'If regulations change, definitely we will actively study the issue.'

Meanwhile, HSBC will continue to pour more resources into the mainland to further expand through organic growth and by working with mainland partners.

Mr Wong said a top-level committee that included the chairman of each bank had been set up to enhance communication and to explore development strategies.

He said the three-year blueprint included launching co-branded banking services such as wealth management products which would be sold through Bank of Communications' network of more than 2,400 branches and be backed up by HSBC's computer system.

The two lenders have a joint mainland credit card business and have issued 800,000 cards.

They are also starting a staff exchange programme. 'We will have 10 of our mangers and deputy mangers in retail banking join the bank in the next three months, while it will send four of their staff in similar positions to us,' Mr Wong said.

In addition, HSBC would develop a securities business with the bank. 'We are looking at many securities houses, but no decision has been made yet,' he said.

HSBC's pretax profit from its mainland operations surged 943 per cent to US$334 million last year. The contributions from its strategic investments, which include Bank of Communications, Industrial Bank, Ping An Group and Bank of Shanghai, accounted for more than 70 per cent of those earnings.

Meanwhile, Mr Wong said that HSBC would continue to grow its mainland business organically, increasing the workforce there by 50 per cent to 3,000 employees this year.

HSBC also plans to open 40 to 50 new mainland branches in the next five years from the present 13.