To better focus on its expansion in Asia, HSBC is considering leaving up to multiple nations, or one in five of the markets it operates in, according to chief financial officer Georges Elhedery, who spoke to Reuters in his first interview after entering the position.
The evaluations are the result of pressure from Ping An Insurance, a Chinese stakeholder that wants HSBC to prioritise expansion in Asia where the British bank generates 78% of its overall revenues.
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“Some of these will have slower progress than others, and none of them is material enough on its own to change the profile of the overall business, but as we progress through and execute on these assessments, we do expect them to contribute towards that shift to Asia,” Elhedery said, reluctant to reveal the markets or time period under review.
According to Reuters, in the previous two years, HSBC’s continued pivot to Asia has resulted in proposed sales of all or parts of its businesses in France, Greece, Russia, and Canada.
Despite the small areas under discussion, the action shows the pressure HSBC is under to scale back its formerly global local banking activities in order to increase profitability and appease investors.
It is difficult to identify underperforming nations because HSBC does not provide performance information for each individual country.
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By GlobalDataHowever, its businesses in Europe and Latin America may be reviewed since the former recorded a net loss in 2022.
Latin America produced slightly less than 5% of total profit.
Mexico is one country that is not currently under consideration, according to Elhedery, despite debate among analysts and investors about the bank’s future position in the country.
The veteran banker stated, “Mexico is performing very well for us,” mentioning the U.S.-Mexico-Canada trade deal and the China Plus One strategy, which have supported its growth.
“Some 70% of client acquisition in the retail business is through employees of the multinational companies that HSBC banks in Mexico, so there are strong synergies with the wholesale business and the package as a whole makes sense for us.”
With its revenues rising and the stock rising 16.5% this year, HSBC resumed share buybacks and dividend payments that had been suspended during the COVID-19 outbreak.
