HSBC targets ‘mid-teens’ Asia returns amid Ping An pressure
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HSBC's top shareholder Ping An Insurance Group has criticised the bank’s current model in Asia as being inefficient.
PHOTO: REUTERS
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HONG KONG – HSBC Holdings says it is targeting return on tangible equity for its Asia business that is in the “mid-teens”, amid pressure from its top shareholder to improve returns.
Ping An Insurance Group has criticised the bank’s current model in Asia as being inefficient. It has taken specific aim at the lender’s returns for Asia, which it said stood at 10.5 per cent in 2022, compared with 13.8 per cent for its Asian peers on average. The Chinese firm is also pushing for a separate listing of HSBC’s Asian arm.
In a stock exchange filing, HSBC reiterated on Monday that the group’s ambition is for returns to be at least 12 per cent from 2023 onwards. It is targeting high single-digit percentage wealth revenue growth, and mid-single-digit percentage lending growth over the medium to long term, the statement said. HSBC also re-emphasised the importance of its international network.
“We now have an unrivalled international proposition that supports our Asia customers looking to trade with and grow in markets across Europe, the Middle East and the Americas, and vice versa,” said chief executive Noel Quinn.
About 60 per cent of wholesale client business in Asia is cross-border, the lender said in a presentation.
HSBC has been pivoting to Asia, selling operations in other parts of the world. It reiterated its commitment to invest about US$6 billion (S$8 billion) in Asia between 2021 and 2025.
The bank, which counts Hong Kong as its biggest market, has also been diversifying its presence in other places in the region, amid rising geopolitical tension.
“In addition to our core strength in Hong Kong, we now have growth engines in mainland China, India, Singapore and beyond,” said Mr Quinn.
The wealth business is key to its pivot to Asia, and the bank has been ramping up operations in the mainland and also aims to launch private banking in India in July.
The lender said it will be holding a week-long seminar for investors and analysts in Hong Kong and Singapore to discuss its ambitions. Rival Standard Chartered Bank is also holding meetings with investors this week. BLOOMBERG
