Discontent as lender pivots to Asia

HSBC Holdings is shipping senior executives from its London headquarters to Hong Kong to seal a pivot by Europe’s largest lender to Asia. The moves are also stoking discontent.

Already smarting from a cut to the bonus pool after losses in Europe, some senior executives in Greater China worry their push could be slowed by added bureaucracy and blurred reporting lines.

With the global heads of investment banking, commercial banking and wealth relocating to Hong Kong this year, senior bankers expect friction with regional chief Peter Wong Tung-shun, who has so far enjoyed a high degree of autonomy.

For HSBC, the changes are intended to demonstrate its commitment to a historic turnaround plan centered on Asia and help speed up local decision making.

The bank has earmarked investments of about US$6 billion (HK$46.8 billion) for the region.

The growing strength of markets and the economy in Greater China is “shifting the geographic balance of power for HSBC,” said Ismail Erturk, a senior lecturer in banking at the University of Manchester.

“But its main institutional shareholders are still international, not from China. This creates a complex situation for HSBC.”

Greg Guyett, the co-head of the investment bank who is one of the executives moving, said the reason for his relocation is not because of poor management in Asia. He emphasized that he would continue to keep his eyes on Europe and the United States as well.

The bank is scheduled to release first-quarter earnings on Tuesday.

“Asia Pacific is central to the long-term growth plans” of the bank and the move reflects HSBC’s intention to “locate more of our global leadership roles in our key growth region,” chief executive Noel Quinn said.

The bank has also started a search to identify a successor for Wong, 69, its long-time chief for Asia Pacific.

A member of the Chinese People’s Political Consultative Conference, Wong’s ties have been pivotal to mending relations with Beijing, frayed by the lender’s role in a US probe of Huawei Technologies.

Wong has been mentoring David Liao Yi-chien and Mark Wang Yunfeng, the heads of Asia Pacific global banking and its China operations.

Along with Guyett, Nuno Matos, chief executive of wealth and personal banking, and Barry O’Byrne, chief executive of global commercial banking, are expected in Hong Kong in the second half.

Nicolas Moreau, who runs HSBC Global Asset Management, is also relocating. Georges Elhedery, co-head of investment banking and markets, will remain in London.


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