HSBC plans expansion on Mainland China
(17 February 2012 – Asia) HSBC will soon become more prominent in mainland China as the world’s second largest banking and financial services group revealed it will increase its presence there.
A massive expansion of its branch network has been planned by HSBC with an alternative plan to raise its stake in Bank of Communications (BoComm) – one of China’s big five banks.
Chief executive Stuart Gulliver said HSBC will either significantly increase its holdings in BoCom from 20 percent if given regulatory approval, or massively expand its mainland branch network by over seven times, or from 110 branches to 800 branches.
Mainland China has long been a core part of HSBC’s expansion strategy. Its latest plans, however, come amid industry concerns over the country’s interest in opening further to foreign banks.
There also has been widespread industry scepticism over the profitability of foreign banks with big branch networks that are quite expensive to operate.
Mainland China contributed US$1.8 billion (A$1.76 billion) of HSBC’s pre-tax profit in the first half of 2011. The majority of this came from its stakes in associate companies, including BoCom. HSBC’s Chinese banking business contributed US$279 million in pre-tax profit in the first half of 2011.
Chief executive Stuart Gulliver said HSBC will either significantly increase its holdings in BoCom from 20 percent if given regulatory approval, or massively expand its mainland branch network by over seven times, or from 110 branches to 800 branches.
Mainland China has long been a core part of HSBC’s expansion strategy. Its latest plans, however, come amid industry concerns over the country’s interest in opening further to foreign banks.
There also has been widespread industry scepticism over the profitability of foreign banks with big branch networks that are quite expensive to operate.
Mainland China contributed US$1.8 billion (A$1.76 billion) of HSBC’s pre-tax profit in the first half of 2011. The majority of this came from its stakes in associate companies, including BoCom. HSBC’s Chinese banking business contributed US$279 million in pre-tax profit in the first half of 2011.
Subscribe