I don’t get the points you’re trying to make
HSBC is a British bank, though.
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This reminded me of a lovely little Jon Ronson story about a conversation with his Dad:
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Ronson’s dad is incorrect. Hongkong and Shanghai Banking Corporation is a subsidiary of British bank HSBC. People in the UK have never had an account at the former.
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I don’t think that’s quite right. From the Telegraph article:
Under Chinese law, companies are required to have CCP committees with three or more employees who are also members of the Chinese Communist party appointed to roles.
They function like a workers’ union but are also a way of installing a party representative within a company’s top ranks, sometimes in a director or management role.
The important thing seems to be that they can act as a mechanism for the Chinese state to instruct businesses on what to do. China being ostensibly a communist, planned economy and all that…
If the Chinese state wants to instruct a business what to do, they’re going to do it regardless of whether there’s a committee or not.
When China wants, China gets.
Some pro’s of being a very wealthy country where businesses can make a sh*t ton of money.
Do I agree with it? No. I would like to see the UK once again a powerful nation that does things for the good of the nation and not the loud minority.
There’s an argument that HSBC should pull out of the UK and the West, and consolidate in the Far East. Depends how much the UK Government can put up with Chinese State interference in its largest bank.
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Apparently Ping An (a Chinese company, and HSBC’s largest shareholder) would like to see a split of assets; with profitable “HSBC Asia” (possibly called Hang Seng Bank, using the Hong Kong brand) made legally separate from the “Western-facing” part of HSBC and floated in China or Hong Kong.
It doesn’t seem that likely in the short to medium term, but eventually it could happen.
Other market commentators have pointed out that such an approach would weaken the overall appeal of investing HSBC in some ways - that the East and West aspect brings balance, and therefore more stability to the share price, and that the global nature of HSBC makes it unique and therefore attractive to investors because of it’s worldwide recognition.
Interestingly, the gripe in Asia is the other way round: are Asian investors, in a bank that makes the majority of it’s money in Asia and is effectively de-facto “at home in Asia”, willing to put up with being regulated by British regulators who get a significant degree of influence over their affairs (as the home of the bank’s legal HQ) despite the U.K. market actually representing a small fraction of HSBC’s business?
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Hang Seng is a subsidiary of HSBC now but it doesn’t perform as well in China. HSBC is probably the ‘leader’ of international banks in China largely due to its international presence throughout the world.
I think even HSBC knows though that it’s UK general people banking business isn’t profitable. They realised it in the US and withdrew all of it. I was lucky enough not to be one of the transferred accounts as I have Premier. They only wanted to keep the “profitable” customers.
They want ‘premium’ customers who do expensive banking. It makes money, everyone is happy. Plenty of people in China do that, not so much in the UK. Their business in the US was primarily catering for Chinese customers - which is largely why it was sold of to Cathay Bank - another bank specialising in Chinese people.
China is where the money is, unfortunately.
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I know, as I say it wasn’t a serious proposal from HSBC themselves. That branding suggestion was just a stab-in-the-dark for something they could use if the rights to the HSBC name stayed with a “rest of the world” bit of the business in the event of a split.
Ping An wanted it because they are insurers who had invested in HSBC expecting regular dividends to fund their payouts at low risk. That didn’t go to plan when the Bank of England ordered all banks to stop dividend payments because of Covid. Ping An appeared somewhat shocked that the Bank of England would do that, and started to stoke the case to separate HSBC as a result.
Other shareholders and executives don’t want it, and recognise that the bank’s power is in it’s global presence, but who knows what will happen in the long term?
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Ping An group in China is very successful though. They have a very large insurance offering and a very large banking offering. One of the few private banks in China to do so.
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Indeed, although they were trying to have their cake and eat it by buying up more shares in HSBC (increasing their holding) when the price was low, then getting irritated that they were not getting dividends. You don’t expect dividends when the share price isn’t doing well!
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HSBC doesn’t really bother with the every-person market in China. They probably expect them to make the same steps they’ve made elsewhere by restricting to the premium, profitable market.
I think it’s only the UK and Hong Kong where they still offer the 99% banking services. I suppose I’m lucky enough to qualify for Premier, their worldwide service is excellent for people living with two different currencies and banking systems and no one else really compared.
There’s Citi but that’s somewhat of a level above me.
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Yes, their focus was never really on “mass appeal” banking products, even back when they operated in many more countries than they do now. It has really always been a premium-focused bank.
The HK and UK situation is a legacy thing really - Hong Kong because that was it’s original home market, and the UK because Midland Bank (which did offer general banking products, rather than targeted premium ones) was acquired by them, so they bought in loads of “average Joe” customers almost by accident, along with everything else from the acquisition that they did want!
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They offer excellent mortgages in the UK, so I suppose that’s a big market for them.
Kind of risk free in a way because if someone defaults on the house, they get the house. In the UK market that’s not really ever going to lead to a loss because our houses keep raising in value.
Annoying for me though because I wanted a mortgage being an expat, was directed to HSBC Expat to open an account and all of that only to be told that I’m not eligible.
Turns out HSBC Offshore only cater to the extreme wealthy. At least I got a few debit cards out of it to add to my collection.
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Yes, there are many levels of wealthy at HSBC, haha!
Off the top of my head:
- Standard
- Advance
- Premier
- Jade
——
- HSBC Expat (offshore in CI or IoM)
- HSBC Private Bank (Switzerland-style)
I say that as a total pleb with only a standard account myself, but at least they let me open a Euro account.
I think Expat should be between Premier and Jade. I certainly don’t qualify for Jade but I’ve got Premier and Expat premier.
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It kind of stops at Jade and then the others are legally-separate branches of HSBC anyway, so there isn’t a linear hierarchy as such (that’s an oversimplification).
I’ll put a line across to indicate the separation instead.
Anyway, regardless of the exact ranking, product segmentation in general is far more obvious at HSBC than most banks - so clearly they are trying to preserve as much exclusivity as possible.
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I wonder how the premium tiers at other banks compare. Especially because of every other banks lack of an international presence.
The worldwide account servicing option from HSBC is top-notch. I’ve never set foot in the US but I’ve got a US ‘checking’ account and credit card from them with a generous limit. Excellent for international spending with no fees and I can pay the balance from any currency. Downside is that transfers internally with HSBC use their own exchange rate which isn’t exactly market leading.
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