The Hongkong and Shanghai Banking Corporation was founded in Hong Kong on March 3, 1865, and in Shanghai one month later. In 1980, HSBC acquired 51 per cent of Marine Midland Bank, buying the rest in 1987. HSBC Holdings was established in Britain in 1991 as the parent of The Hongkong and Shanghai Banking Corporation ahead of its purchase of the UK-based Midland Bank and the impending 1997 transfer of sovereignty of Hong Kong from Britain to China.
Shanghai's plans won't affect Hong Kong, HSBC says
Chief Anita Fung sees no threat to city from free-trade zone and is keen for bank to move in
The chief executive of HSBC's Hong Kong office, Anita Fung Yuen-mei, said yesterday that Hong Kong would not be marginalised by a new free-trade zone being set up in Shanghai.
"The mainland market is so huge; Hong Kong will not be marginalised when Shanghai continues to develop," Fung told a media conference.
She said the interaction between the two cities would be positive to the overall development of the mainland.
Fung also expressed interest in setting up shop in the new zone, saying HSBC would definitely consider participating when more details were unveiled.
Premier Li Keqiang had approved a milestone plan to allow foreign banks to directly set up wholly owned subsidiaries in the free-trade zone in the Pudong New Area, the South China Morning Post reported yesterday.
Foreign banks including HSBC and Citigroup already have branches and wholly owned units on the mainland, but the short cut to set up units in the free-trade zone in Shanghai is expected to attract more international banks keen to secure a foothold in the world's second-largest economy.
Mainland banks experienced a cash crunch at the end of last month, when yuan interbank rates doubled, but Fung said she expected the situation would be much improved at the end of the third quarter. "I believe the mainland banks will have better preparation on lending policy and liquidity," she said.
Hong Kong banks have also been nudging up interest rates on yuan deposits. After three banks launched yuan deposit plans on Monday, Dah Sing Bank offered an interest rate of 3.6 per cent on one-month yuan deposits yesterday, with a minimum deposit of 20,000 yuan.
Fung said she expected interest rates on deposits, regardless of currency, would be stable or rise slightly in the second half of the year. And she said she expected the growth of yuan deposits in the city would stabilise at a lower rate in the near term, adding that it was "unlikely to see 2 to 3 per cent growth every single month".
HSBC reiterated its expectation that the yuan would be fully convertible within five years, and that 30 per cent of deposits in the city's banking system would be denominated in yuan by 2015, up from the current 10 per cent.