Standard Chartered, Hang Seng Bank close branches as citywide strike, protests wreak chaos in Hong Kong
- All three note-issuing banks in Hong Kong saw their shares fall to the lowest level in three months as a citywide strike disrupted travel and violent protests continued
- The yuan falling below 7 per US dollar in response to Trump’s new tariffs also hit the share prices
Seven of Hong Kong’s biggest banks – including two note-issuing lenders – closed branches on Monday as strikes and protests brought large parts of the city to a standstill.
HSBC Holdings said it had closed 10 of its branches at 2.30pm. Hang Seng Bank, a subsidiary of HSBC, said it had shut five branches for most of the day, while 15 more closed early, in the afternoon.
Standard Chartered, one of the three banks that issue currency in Hong Kong, closed several branches in the afternoon, China Citic Bank International closed five out of its 30 branches, and Citibank closed all 19 branches earlier than usual.
Singaporean lender DBS closed all of its branches in Hong Kong, saying it was for the safety of its staff.
Most of the banks’ closures were in areas including Tsuen Wan, Mong Kok, Tai Po and Admiralty.
Meanwhile, ICBC Asia, the Hong Kong arm of Industrial and Commercial Bank of China, the country’s largest lender, said on Monday evening it was shutting all its branches until further notice.
The Hong Kong Monetary Authority, the city’s de facto central bank, said late on Monday night: “Due to protests and traffic congestion in different districts, two bank branches were closed for the entire day, while about 230 bank branches closed earlier than scheduled. The foreign exchange and money markets have been operating in an orderly manner.”
Louisa Cheang, vice-chairman and chief executive of Hang Seng Bank, said: “We respect the decision of some staff if they decide to join the strike while we need to make sure the branch operation can continue.
“We have decided to close five small branches on Hong Kong Island early today to transfer manpower to support other branches. We also decided to close more branches in the afternoon for the safety concern of our staff. We will continue to monitor the situation.”
All three note-issuing banks in Hong Kong saw their shares fall to the lowest level in three months as a citywide strike disrupted travel and violent protests continued. At the same time, China’s currency fell below a psychologically important level for the first time in a decade after its trade war with the US escalated again.
Bank of China (Hong Kong) dropped 4.5 per cent on Monday morning to HK$27.8 before bouncing back to close at HK$28.1. Standard Chartered Bank went down 4 per cent to HK$62.3, and HSBC Holdings fell 1.8 per cent to HK$61. The wider Hang Seng Index dropped 2.9 per cent as strike action brought much of the city’s transport network to a standstill.
HSBC faced a double blow as its chief executive John Flint stepped down after just 18 months in office.
Its subsidiary Hang Seng Bank plunged 4 per cent in the morning, also to a three-month low, to finish the morning at HK$174. It recovered slightly to close the day 3.6 per cent lower at HK$174.9. In a results announcement on Monday morning it said its expected credit losses and impairment charges had doubled to HK$510 million in the first half of this year.
“Banks and all sectors went down because of the slide of yuan and the strike. If [the strikes] become routine, like the protests over the past two months, it will be destructive,” said Louis Tse Ming-kwong, managing director of VC Asset Management.
“Chief Executive Carrie Lam Cheng Yuet-ngor’s speech on Monday morning provided no solution to Hong Kong’s current crisis. These are all bad omen and led to the sharp fall of the market today.
“HSBC Group and BOCHK are the major mortgage providers in Hong Kong. The protests and strikes are going to hurt the property market in the medium term and hence may lead to more bad debts for banks.”
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The yuan on Monday morning fell below 7 against the US dollar for the first time in about 10 years, and just days after the US president threatened to impose a new 10 per cent tariff on US$300 billion worth of Chinese products from September 1.
Shares of the big four state-owned Chinese banks all dropped to their lowest level in recent years on Monday morning. Bank of China fell 2.6 per cent to HK$3.05 while Agricultural Bank of China lost 2.6 per cent to HK$3.02 – both down to their lowest since mid-2016.
Industrial and Commercial Bank of China slid 2 per cent, while China Construction Bank lost 2.53 per cent, both trading at their lowest in two years. Bank of China Communications, another major mainland Chinese lender, lost 1.4 per cent to trade at a one-year low.
Ivan Li, head of CSL Securities Research, said the yuan’s weakness was a more important factor than the protests in Hong Kong as the former would have a bigger impact on banks and companies.
“It should be noted that the recent move by the US Fed to cut the interest rate would probably be bad for the banks’ net interest margins,” Li said.
