British bank HSBC Holdings Plc announced that it intends to invest about $ 6 billion in Asia in the next five years.
At the same time HSBC plans to sell unprofitable retail operations in the USA and France.
HSBC currently operates in 64 countries, but derives most of its profits from operations in Hong Kong and mainland China.
HSBC finds itself in a difficult situation due to the deterioration of relations between China and Western countries, in particular due to the introduction by Beijing of the national security law for Hong Kong.
Noel Quinn, chief executive officer of HSBC Holdings Plc, has been criticized by British lawmakers over the bank’s backing for the law. HSBC is “moving the core of its business to Asia, including the governing center,” Quinn said Tuesday.
“The bank will retain its legal registration in London, but I think that for some of its leaders it is important to be closer to the place of growth,” he said.
According to Quinn, HSBC “will stop trying to be everything to everyone” and will focus on priority areas, including becoming a market leader in serving wealthy Asian clients.
Other areas that HSBC considers to be key areas include retail banking in Hong Kong and the UK, facilitating cross-border trade and capital flows to Asia and between Asian countries.
The bank expects that over the next 3-6 years, half of its capital will be in Asia.
HSBC plans to sell its U.S. retail division, which posted a pre-tax loss of $ 547 million in 2020.
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In addition, he is in talks to sell a losing French business, which he has been trying to get rid of since at least 2019. In 2020, HSBC’s net profit fell 35% to $ 3.9 billion.
Last year, the bank allocated $ 8.82 billion to reserves for possible loan losses, while in 2019, contributions to these reserves amounted to less than $ 3 billion.
HSBC’s annual revenue decreased by 10%, to $ 50.4 billion. By the end of 2020, the bank will pay dividends of $ 0.15 per share.
HSBC was down 1.3% in Hong Kong on Wednesday and is down 0.7% in London.