Noel Quinn took the top job at HSBC with a clear plan in mind, articulated at the full-year results announcement in February. The highlights: become a world leader in wealth management, particularly in Asia; lead the world in serving mid-market corporates globally; be the leader in cross-border banking flows aligned to trade and capital corridors; and do all of this while digitalizing, transitioning to net zero and accepting that low interest rates globally are here to stay.
These were all sensible calls, if sometimes largely indistinguishable from previous strategic announcements, and by now it is possible to make some assessments of how it is all going.
Third-quarter numbers showed a 76% jump in reported profit before tax versus the same quarter a year previously, primarily due to releases of provisions set aside for Covid-related credit deterioration that just hasn’t happened.
In Asia, there are encouraging signs: revenues are climbing and, in particular, $3.1 billion of net new money into the private bank in Asia, out of a global total of $3.9 billion, is exactly the sort of momentum Quinn wants to see. Much will depend on the progress of the bank’s private-wealth drive in China; wealth chief Nuno Matos has said he expects to have 700 new private bankers on the mainland by the end of the year, and there are already 450 wealth planners in force in the innovative Pinnacle venture there.
Progress in wealth will really be the key determinant of whether Quinn’s time in charge is seen as a success. It’s a natural area to prioritize but incredibly competitive, particularly in Asia, where he wants to grow the most.
“We’re doing it from a position of strength,” Quinn says. “We’re not doing it from a blank sheet of paper.”
But getting to where he wants to be will require a host of ideas and probably acquisitions: the purchase of Axa Singapore, on the insurance side, is likely to be the first of several, and Quinn confirms to Euromoney: “I’m looking at three to four more acquisitions in Asia.”
Progress in wealth will really be the key determinant of whether Quinn’s time in charge is seen as a success
Quinn spoke with us in detail about trying to make sure that Asia doesn’t just mean Greater China, a measure Euromoney sees as all the more essential given social and geopolitical tensions around Hong Kong and the mainland.
Half of the promised $6 billion of investment in the region will go to south and southeast Asia. The new partnership with Temasek is a visible example of HSBC marrying that diversified intention with an existing, and building, strength in sustainability.
Quinn has also followed through on his predecessors’ attempts to shut non-core or marginally profitable businesses, chiefly in retail in France and the US, though as he tells us, “a lot of the heavy lifting has been done over the previous years.”
On the earnings call both he and group CFO Ewen Stevenson spoke frequently about the gift of returning inflation and how it will boost their numbers through rising rates.
It is true that, for reasons both macro and strategic, there is a sense of wind in the sails of HSBC as with much of global banking. But its exposure to Greater China in a bitterly divisive geopolitical environment will require this vast bank to be nimble, smart and alert.
