HSBC targets five ‘billion dollar’ markets in Asia

HSBC expects India, Singapore and Malaysia/Indonesia to each deliver over US$ 1 billion in profit before tax in the medium term, joining Hong Kong and mainland China as ‘billion-dollar’ businesses, to accelerate the Bank’s growth in the region. A sharper focus on building scale at a faster pace in the region’s fast-growing markets is a key part of the strategy articulated for Asia in the HSBC Group Strategy Day held in London recently.

Peter Wong, Chief Executive of HSBC in Asia-Pacific, said: “As Asia’s global bank, HSBC will cement our leadership in the region by growing aggressively in key markets as we continue to lead in Greater China. We have a solid platform for growth and a proven track record to deliver on our strategy to build a balanced and diversified business in Asia. Our distinct ability to connect customers to global opportunities in trade, investments and wealth will drive our ambitions in the world’s strongest economic region.”

In setting the Bank’s strategic direction for Asia, Wong underscored three areas of focus to drive growth: expand leadership in Greater China; build scale in key markets (Hong Kong, mainland China, Australia, India, Singapore, Malaysia and Indonesia) and strengthen cross-border capabilities to lead in international connectivity.

HSBC is the largest foreign bank in Greater China with over 270 outlets across mainland China, Hong Kong, Macau and Taiwan. In Hong Kong, where the Bank delivered profits of US$1.6 billion and grew revenues by 8 per cent in the first quarter of 2011, HSBC holds the largest market share in deposits, credit cards, mortgages and local bonds. HSBC aims to break into new leadership segments such as insurance and equity capital markets while capturing opportunities from the emerging mass affluent Chinese and businesses with international needs.

Wong stressed that stronger connectivity with mainland China will not only redefine the strategy for HSBC’s business in Hong Kong, but will become a key driver of revenues across HSBC’s network in Asia and globally.

Wong said: “China is increasingly becoming a major trade and investment partner for many countries in Asia and across the world. HSBC currently works with 60 per cent of the top 100 PRC companies with overseas investments and we expect to grow these relationships as we continue to invest in our cross-border capabilities, such as expanding the coverage of our dedicated China desks beyond 14 markets globally.”

Outside of Greater China, which is expected to continue to deliver multi-billion dollar profits, the Bank is looking to the potential of Asia’s fast-growing economies to boost the contribution of the rest of Asia-Pacific.

In India, where HSBC made nearly US$700 million in 2010, the Bank is aiming to reach US$1 billion in profit before tax in the medium term. The strategic focus is to lead financing for the country’s top domestic and international companies while tapping into mass affluent overseas Indian populations to grow wealth management.

As Singapore strengthens its position as a regional wealth and trading hub, HSBC plans to add relationship managers for Premier and Private Banking while expanding its structured trade finance capabilities to reach its US$ 1 billion profit ambition in this market.

HSBC also aims to generate US$ 1 billion from Malaysia and Indonesia combined in the medium term, as the Bank strengthens its Islamic finance capabilities and builds on its recent investment in Bank Ekonomi to expand relationships with Indonesia’s significant SME segment.

Australia is also seen as a priority market with its increased trade connections with Greater China and its growing mass affluent population with Chinese linkages, providing HSBC with a clear competitive advantage to lead in the international banking segment.

Wong said: “HSBC is wherever our customers plan to grow their wealth or expand their business. The breadth of our capabilities and unrivalled international network mean that we can work harder for our customers across a range of needs as their personal and corporate growth ambitions evolve.”

Nick Nicolaou, Chief Executive Officer for HSBC Sri Lanka and the Maldives said, “We are already making a very positive contribution to the Group’s Asia Pacific performance. Our international connectivity also gives us a unique advantage to assist our customers in their trade, foreign exchange, capital market and infrastructure finance requirements, as well as give our personal clients access to global propositions such as HSBC Premier and Advance. We will continue to help our customers capitalise on the opportunities that the region presents.”