London-based HSBC wants to ramp up its presence in the Middle Kingdom. But joint ventures with local financial institutions have not always worked out as intended. Will this time be different?
British bank giant HSBC became the first foreign majority-owned securities firm in China when it establish a joint venture with Qianhai Financial Holdings. Now, the firm plans to quickly ramp up its presence in the Middle Kingdom, saying it will more than double the size of its team to about 300 within four years, news agency «Bloomberg» reports.
HSBC already generates the majority of its revenue in Asia and has pledged to deepen its commitment there, especially in the Pearl River Delta which is now China's fintech hub. The Swiss banks UBS and Credit Suisse also plan to increase their presence in China.
Rising Staffing Levels
UBS’ onshore investment bank business in the country has a current workforce close to 400 people, as a UBS spokesman told finews.asia. The bank's Chairman Axel Weber recently underlined UBS' long-term commitment to ramping up in China.
Credit Suisse owns 33.3 percent of Credit Suisse Founder Securities, a Beijing-based joint venture established with Founder Securities in 2008. The bank could not confirm the current staffing levels at the joint venture to finews.asia. CEO Tidjane Thiam recently announced plans to increase wealth management and securities business in China.
No Timetable
Joint ventures in China by foreign banks have not always worked out as intended. In 2016, J.P. Morgan walked away from its First Capital vehicle after six years of partnership – due to lackluster profit growth. First Capital Securities, a Shenzhen-listed securities group, eventually bought out the 33.3 percent stake.
Liu He, a key economic adviser to Chinese President Xi Jinping, told the World Economic Forum in Davos that China would further open the banking industry, but gave no timetable and no further details have been forthcoming since the speech.
