Peter Wong: A steady hand in a crisis


Clive Horwood
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As part of Euromoney's 50th anniversary coverage, we profile some of the biggest names that we interviewed for our May Asia focus.

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“If there’s one thing I have learned in my career it is how to deal with a crisis because I have lived through so many of them,” says Peter Wong, a 40-year veteran of banking in Asia and today chief executive of Asia Pacific at HSBC.

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Peter Wong,

In the early 1980s, US Fed tightening led to rising rates and a round of defaults and delinquencies in Hong Kong. In September 1983, Black Saturday saw a collapse of the Hong Kong dollar because of uncertainties about the future of Hong Kong and the Sino-British agreement, which a month later led to the HK dollar being pegged to the US dollar. Then there was the 1987 global stock market crash. And, of course, the Asian financial crisis in 1997, which arrived around the same time as the handover.

But one crisis stands firm in Wong’s memory. In 1991 there was a febrile atmosphere surrounding the global banking industry after the collapse of BCCI that year.

On a sweltering summer Wednesday in Hong Kong, rumours started circulating that Citi, among others, was in real trouble. It all began at a branch in Hung Hom, on the Kowloon side of the harbour. These were the days before social media, but rumours were spreading fast.

“There were faxes circulating that a number of banks were in trouble, and people just started queuing outside one branch after another to get their money out,” Wong recalls.

Wong and his team started to worry that, if the queues lengthened and persisted, their branches might start to run out of cash – sending an even more worrying message. One competitor suffering a similar situation had limited cash withdrawals to HK$20,000 ($2,500) – anything more would have to be paid by cheque.

“We thought that limiting cash withdrawals but using managers’ cheques on the balance would send the wrong message, and decided we would allow customers to withdraw as much cash as they wished, even though some were taking millions of [HK] dollars out,” Wong says. “The issue was one of logistics – cash levels were quickly depleting in some branches, even though across the city as a whole there was adequate supply.”

Desperate measures

The cash-flow situation was exacerbated by the robbery that day of a Securicor van transporting money around the island. That led to other secure deliveries being suspended. That led in turn to desperate measures. At one point Wong got in a car with a colleague, but no security, to take a large amount of cash to a branch that was running low.

Wong then considered whether or not he needed to close the branches. He decided against it, telling his team to treat the next day, Thursday, as a “normal, but very busy day. And we promised customers we would serve them.”

At one branch, Wong saw an elderly woman come and withdraw HK$4 million. Laden with money in plastic bags, she asked Citi to get a security detail to accompany her home. The bank could not. She asked policemen – again they declined. In the end, she decided it was safer to keep the money in the bank than carry it home herself, and re-deposited the money.

Others didn’t and the cash drain worsened. But then Wong and his team had an idea.

“We realized that all the TV cameras and media had congregated around a branch with long queues in the Central district. It was still very hot. So we arranged to open up a space in the building next to the branch and move the queues inside, offering customers a queue number, cold drinks, snacks and crucially air conditioning.

“Suddenly the TV cameras weren’t broadcasting any queues, the panic started to subside, and was eventually killed off by a massive rainstorm on the Saturday. No one wanted to queue in that!”

Wong’s unflappable approach to a crisis also came into good use during the Asian financial crisis. As the Hong Kong stock market was in free-fall, Wong was chairman of the Hong Kong Association of Banks and leading their response to the crisis.

At one low point, he had to give a press conference to reassure people that Hong Kong’s banks were safe. “I’ve never seen anything like it before or since,” he says. “There were about 60 TV camera crews there and just this huge sense of panic. I knew if I got one word wrong it could be a disaster. But we had got through crises before, and eventually, working closely with the HKMA, we got through this one too.”