Hong Kong banks feeling the pain of losing transaction business as over 400 branches shut amid pandemic

Twenty banks temporarily shut another 135 branches in the last seven days, bringing the total number of closures to 412 or 37 per cent city-wide

Two weeks after closing about one third of its branches, it was ‘inevitable that some face-to-face business’ has been lost, said Standard Chartered’s Hong Kong CEO

2-MIN READ2-MIN

Retail banks have suspended branch services to help contain the fifth wave of Covid in Hong Kong. Photo: SCMP / Felix Wong

Published: 8:30am, 21 Feb 2022Updated: 2:55pm, 21 Feb 2022

Hong Kong banks are bearing the brunt of losing their over-the-counter transactions business as the widespread closure of branches amid the pandemic enters its second week, bankers and analysts say.

Twenty banks temporarily closed another 135 branches over the last seven days, bringing the total closures to 412 city-wide as of Saturday, based on a Post analysis of announcements by banks. This represents 37 per cent of the 1,100 local branches versus 25 per cent a week earlier.

HSBC has shut 50 branches while Bank of China (Hong Kong) closed 90 outlets – both amounting to half their network. Standard Chartered and other lenders have closed about 30 to 40 per cent of their branches.

Banks started closing some branches on February 7, after Hong Kong’s fifth wave of Covid-19 began to escalate. The closures quickly doubled from about 200 in just two weeks as more staff became infected.

“Two weeks after closing about one-third of our bank branches, it is inevitable that some face-to-face business [transactions] have gone down,” said Mary Huen Wai-yi, chief executive of Standard Chartered Bank Hong Kong. The hardest hit were transactions involving large sums and wealth management advisory services.

“Customers like to go to a branch to deposit or withdraw a large sum of money,” she said during a post-results media briefing. “Customers also like to have face-to-face discussion with our investment advisers at the branch about their investment portfolios at the beginning of the year.”