Mainland Chinese will soon be seeing much more of HSBC.
HSBC, the world’s second largest banking and financial services group, said it will increase its presence in the Mainland through a massive expansion of its branch network or by raising its stake in Bank of Communications (BoCom), one of China’s big five banks
Chief Executive Officer Stuart Gulliver said HSBC will either significantly increase its holdings in BoCom from 20 per cent 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 skepticism over the profitability of foreign banks with big branch networks that are quite expensive to operate.
Mainland China contributed US$1.8 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.
Do you know more about this story? Contact us anonymously through this link.