Tyme for Asia as HSBC and South African Online Bank Expand
The bank HSBC (HSBC) has bent over backwards to keep the leaders of the Chinese Communist Party happy. It’s very clear why, after the bank announced it would intensify its shift to Asia, moving the heads of several key business lines to Hong Kong from London.
Britain’s biggest bank is also well down the line in offloading its U.S. retail banking operations. It wants to sell that 150-branch operation, keeping its U.S. corporate and investment banking, and is also close to shedding its 200-branch consumer bank in France.
It is not alone. The South African online-banking startup TymeBank is making the Philippines its first major overseas market for expansion. TymeBank is selling minority stakes in the company to the Filipino conglomerate JG Summit and the British private-equity group Apis Partners. That has raised US$108 million to fund the South African company’s Asian push.
Banks both big and small are focusing on Asia, in other words, the part of the world with the strongest growth. It’s a seismic shift. Banking is by nature a pretty boring business. You hardly expect revolutionary change to come from within the industry. So it’s a process that comes as the banks follow their customers, and where economies are strongest.
HSBC is the largest European bank by assets and market capitalization, and among the 10 biggest in the world. It’s technically based in London, but listed both there and here in Hong Kong, where it got its start. The Hongkong and Shanghai Banking Corp. started life with one branch along the Hong Kong waterfront in 1865, funding trade between Europe and Asia’s bustling port cities.
On Tuesday, it said 2020 pre-tax profits were down 34% to US$8.8 billion, from US$13.3 billion in 2019. To be honest, it was better than expected, and the bank is still making good money during a horrible pandemic and recession. Of the profits, 90% come in Asia. Revenue last year fell only 8%, to US$50.4 billion.
There has recently been plenty of tension between the U.K. regulatory and political oversight it must endure, and pressure from Beijing, which it must keep happy so it can continue to make money in China. The bank is also looking to expand its presence in Singapore.
Singapore is benefiting from a flood of private capital as rich Hong Kongers look to move money out of town. The Communist Party has embarked on a draconian crackdown in Hong Kong, revealing its hand as a brutal enforcer that will cut down any critics, large or small, and tolerate no political dissent. Tuesday it announced changes to ensure all civil servants and political candidates, big and small, must be “patriots,” by which the Communist Party essentially means they must love the Communist Party. It’s a sign that the Communist Party will bar pro-democracy candidates from running in upcoming elections, and in fact wants one-party rule. Beijing’s lackeys in the Hong Kong government will be itching to remove district councillors after pro-democracy candidates swept those small-scale elections across the territory in November 2019, at the tail end of the anti-government protests here. Citywide elections for congress were delayed by a year due to the “pandemic.” Of democracy.
HSBC prominently allowed its Hong Kong CEO to be photographed signing a petition in support of a terrible “national security” law, which inhibits civil liberties in all manner of ways, and allows the Chinese secret police to operate unhindered in Hong Kong. Since its passage, without the input of any Hong Kongers at all, the law has been used to round up hundreds of dissidents and critics of the Communist Party, wrapping them up in incessant court cases about obscure or fringe infractions.
The British bank is in a tough spot, for sure. The hard-line pro-Beijing former chief executive of Hong Kong, C.Y. Leung, pointedly asked on his Facebook page why this foreign interloper should be allowed to make so much money in Hong Kong if it itself doesn’t demonstrate the…
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