HSBC puts partnership into practice
HSBC is in the vanguard of foreign banks’ invasion of China and its partnership with Bank of Communications means that it is well positioned to expand. Chris Leahy speaks to HSBC’s China chief and his counterpart at Bocom about their businesses and the way they are working together.
HSBC’s ORIGINAL NAME lends credence to its claim to enjoy a unique position in China. The Hongkong and Shanghai Banking Corporation opened in Shanghai just one month after it started business in Hong Kong, and subsequently built up an uninterrupted legacy of 140 years of business in China. Now that China is finally opening up to foreign banking competition, the job of turning that legacy into hard profits rests with Richard Yorke, HSBC’s chief executive officer for China.
“We’re the largest foreign-owned bank in China,” Yorke says. “We’re seen as very committed to China – when we invest in a country, we’re very focused on the long term, and that’s appreciated by the government here.”
Proof of that commitment is the partnership with Shanghai-based Bank of Communications (Bocom), China’s fifth-largest bank, which involved HSBC taking a 19.9% stake in Bocom in July 2004 for $1.75 billion. The partners have already established a close working partnership.
“The most visible aspect of the relationship is our credit cards business,” Yorke says. “More than 650,000 cards have now been issued jointly. The business already employs 700 people, and that includes 20 secondees from HSBC.”
“We’ll focus on retail and smaller companies,where we can get better pricing and more fee income”
Staff swaps are already taking place between the two banks at all levels, says Zhang Jianguo, president of Bocom.