What HSBC has done and achieved in the GBA is admirable. It has successfully married its deep roots in Hong Kong and its strong onshore and offshore China franchises with its global network and its reputation and credentials as one of the foremost banks to connect East and West. This year, it wins Asiamoney’s award for best international bank for the Wealth Management Connect.
Launched in September 2021, the WMC scheme allows eligible residents in the GBA to invest in wealth management products distributed by banks on the other side of the GBA divide. It consists of the northbound and southbound schemes – southbound referring to residents in the mainland GBA cities investing in wealth products in Hong Kong or Macau, and northbound referring to residents in Hong Kong and Macau buying wealth management products distributed by mainland banks.
When the WMC was officially launched, HSBC (under its head of GBA, Daniel Chan) was ready to roll out its offerings to clients. Its roster of products that southbound customers can invest in include: about 40 unit trusts across multiple currencies and different fund types; nearly 30 bonds, both corporate and government, offering annual coupons of 1% to 5.75%; and deposits in 11 different currencies, from the standard US dollar, renminbi and Hong Kong dollars, to Canadian dollars, New Zealand dollars, pounds sterling, Japanese yen, Singapore dollars, euros, Swiss franc and Australian dollars.
Northbound investors can get their hands on local unit trusts distributed by HSBC China, with access to about 20 selected bonds, balanced funds and money market funds.
By the end of February, HSBC had a 23% share of all renminbi invested in northbound funds and a 34% share of all renminbi invested in southbound funds, among all banks offering GBA WMC products.
By early May, over Rmb30 million ($4.5 million) was funded-in through more than 800 accounts with HSBC.
HSBC’s senior GBA bankers say the trick is to stay close to customers, listen to their feedback and fine-tune your business in line with that feedback.
Outside the WMC, HSBC has a strong position in the rest of the GBA market, where it has made considerable investments in recent years, both in staff and in digital capabilities.
Take its wealth and personal banking business. The franchise has performed consistently, despite the upheaval caused by the pandemic. In 2021, the division was able to increase the number of its mutual customers (those with both Hong Kong accounts and accounts in the Pearl River Delta) by 12% year on year.
For its affluent GBA clients, with more than $1 million in investable assets, HSBC launched a new wealth and insurance centre in the heart of Hong Kong.
HSBC offers a dual-currency card for its wealthy customers, international mortgage services, mobile wealth advisory services (as well as a team of about 800 personal wealth planners in six GBA cities), and a full suite of asset management options.
In commercial banking, HSBC supports small and medium-sized enterprises in the GBA with innovative digital solutions. It is ambitious on this front: it aims to boost its Pearl River Delta SME client base by 10 times within the next five years.
One of its standout offerings in commercial banking is the GBA 4-Connect comprising: account connect (single account application portal); payment connect (improved experience); service connect (one unified hotline, live chat and chatbot); and credit connect (one-stop credit package for all business within GBA).
This approach helped HSBC to acquire about 6,000 new customers in GBA last year, and it received more than 7,000 enquiries. It recorded 30,000-plus transactions worth $3.15 billion using payment connect, and used over $800 million under the shared-credit facility on credit connect.
The team says trade connect is coming to enhance cross-border trade services within GBA.
Other notable elements of HSBC’s GBA franchise are: the launch of a technology fund, a healthcare fund and sustainability fund for the region; a WeChat mini programme for SMEs; robust liquidity and cash management options for clients; an enviable roster of GBA clients within investment banking and capital markets; and a 90% stake in HSBC Qianhai Securities, the bank’s securities joint venture in mainland China.
HSBC boosted its stake in the JV in April. In late 2021, the bank received new asset management and trading licences in China, and is now gunning for more.