World’s banks have faith in China’s long-term future

World’s banks have faith in China’s long-term future

Leading global banks’ confidence and long-term commitment to the Chinese market has not been shaken by Shanghai’s recent lockdown or short-term disruptions caused by the city’s Covid-19 outbreak.

Mark Wang, president and CEO of HSBC Bank (China), said the company has already noticed a swift recovery in supply chains and resumption of production in the city.

“We are confident in Shanghai’s capability to control the pandemic as well as revive its commercial and economic vibrancy. The city’s solid economic foundation, amicable business environment, as well as the openness and inclusiveness deeply embedded in the city’s genes, are still of much attraction to multinational companies. Therefore, HSBC will still be rooted in Shanghai and serve China’s economic development,” said Wang.

To underline its commitment to the Chinese economy, HSBC China has launched its global private banking business in Shenzhen, expanding its wealth management footprint in the Guangdong-Hong Kong-Macao Greater Bay Area. HSBC’s global private banking business now covers four Chinese mainland cities: Shanghai, Beijing, Guangzhou and Shenzhen.

Nearly half of all the foreign banks registered with Chinese central regulators have set up their regional headquarters in Shanghai, official figures show.

 

Delayed loan repayments

However, Standard Chartered said it was aware of the difficulties that companies, especially small and micro-sized ones, are facing due to the lockdown measures. The bank has allowed many of these smaller firms seriously affected by the pandemic to delay some loan repayments by up to six months.

In the meantime, the bank’s Shanghai branch has increased efforts to ensure the outbound businesses of its clients. For example, it produced over $1 million cross-border letters of indemnity for A-share listed Sieyuan Electric so it can maintain normal trade with its business partners in Pakistan, Zambia and Sri Lanka.

Considering China as “the most important and top strategic market”, Standard Chartered has committed to investing $300 million in expanding its China-related businesses to capture opportunities arising from the country’s continued opening-up, said the bank’s executive vice-chairman and China CEO Jerry Zhang. It is also applying to set up a securities company in Beijing, she said.

Also positioning China as a strategically important market in the Asia-Pacific region and globally, Credit Suisse, Switzerland's second-largest bank, has faith in China’s long-term prospects given the continued opening-up of its capital market, said the bank’s China CEO Janice Hu.

Despite current challenges, Credit Suisse continues to recruit in China to grow its business there, said Hu.

Hu said that all of its Shanghai entities are in a good position, which can be attributed to the new work model that its global headquarters implemented in May 2021 allowing employees to work flexibly. By ensuring the bank’s productivity did not fall away during the disruptions, Credit Suisse has been able to work with its Chinese charity partner to support Covid-19 relief efforts in Shanghai.

 

Ongoing digital transformation

Citi China said the impact of recent disruptions in Shanghai has been “insignificant”, thanks mainly to the bank’s ongoing digital transformation in corporate and commercial banking in China.

Ever since the latest outbreak in Shanghai, Citi has helped a STAR Market-listed company with urgent international payments. It also helped a multinational company with a capital injection into a Shanghai-based subsidiary.

Despite short-term uncertainties, Citi is confident in the Chinese financial market where its clients “increasingly want access”.

The bank said it will hire at least 100 women tech professionals in China this year, with some of them based in the bank’s technology hub in Shanghai’s Pudong New Area. The Chinese mainland and Hong Kong will make up over 50% of new recruitment in the Asia-Pacific area for Citi’s commercial bank business in the next three years, it said.