Japan’s largest online broker SBI says it may downsize in Hong Kong as city’s financial future comes under threat by security law

Name: Over a third of American businesses are thinking about leaving Hong Kong, AmCham survey finds
Uploaded: 2020-09-09T10:05:10.000Z
Duration: 5 min 58 s
Description: Over a third of American businesses are thinking about leaving Hong Kong, AmCham survey finds

Hong Kong’s status as an international financial hub is likely to decline in the future, a spokesman at the Tokyo-based brokerage said

SBI, which operates a licensed brokerage in Hong Kong, employs between 50 and 100 people in the city

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General view of skyline buildings in Central, Hong Kong, on 29 May 2020. Photo: Warton Li

Chad Bray

Published: 6:05pm, 9 Sep 2020Updated: 6:39pm, 9 Sep 2020

SBI Holdings, Japan’s largest online broker, is considering whether to downsize its Hong Kong operations in the next one to two years, becoming the first Japanese financial institution to retreat from the city amid rising concern about the city’s financial role under China’s national security law.

The company is considering a retreat from the city as Hong Kong’s status as an international financial hub is likely to decline in the future, a spokesman at the Tokyo-based brokerage said, confirming earlier reports by Japanese media. SBI may help set up an international financial hub in western Japan’s Kansai region which encompasses Osaka, the Nikkan Kogyo reported earlier, citing the broker’s chief executive Yoshitaka Kitao.

SBI, which operates a licensed brokerage in Hong Kong’s Admiralty, employs between 50 and 100 people in the city, the spokesman said.

The move by SBI comes as Japan’s government is undertaking efforts to recruit financial firms following Beijing’s adoption of a controversial national security law for Hong Kong, which critics say threaten freedoms in the city. Prime Minister Shinzo Abe, who recently announced plans to resign due to health reasons, said in June that Japan could potentially take in financial workers and other Hong Kong residents with specialised skills following the law’s adoption.

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Over a third of American businesses are thinking about leaving Hong Kong, AmCham survey finds

SBI, with Ұ627 billion (US$5.9 billion) in market capitalisation, had 8,000 employees on staff as of March 31. The broker earns most of its revenue in Japan, with the annual contribution from its home market never dropping below 75 per cent since 2008, according to Bloomberg data. Its first-quarter net income jumped 39 per cent to Ұ16.3 billion, on revenue that jumped 21 per cent to Ұ111 billion in the three months ended June.

Japan’s top financial regulator, the Financial Services Agency, also announced plans in August to undertake potential tax reform and other measures to help attract more financial firms to the country.

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