HSBC appoints new co-heads for Asia, its largest profit center
Published: Jun 08, 2021 05:07 AM
File photo: HSBC Photo: VCG

File photo: HSBC Photo: VCG

HSBC Holdings, the London-based banking giant, has appointed David Liao, former head of global banking in Asia Pacific and Surendra Rosha, former India chief, as co-CEOs for its Asia arm, read a company statement on Monday.

Analysts said that appointing new heads may be an effort by HSBC to improve its image in China, but substantial changes are necessary and just appointing new senior staff will not be enough. 

Current Asia CEO Peter Wong will step down and move into a non-executive chairman role during the transition. Wong has been in the position since 2010, during which the bank's reputation has been damaged due to its alleged involvement in the arrest of Huawei CFO Meng Wanzhou in Canada.

According to a statement by HSBC, Liao and Rosha will share pan-regional leadership responsibilities and lead the next phase of the bank's Asia strategy.

"David and Rosha will lead this next phase of our Asia strategy as we focus on expanding and diversifying our presence across the world's most dynamic region," Noel Quinn, CEO of HSBC, said in the statement posted on Twitter on Monday.

Liao has been HSBC's head of global banking and markets and CEO in China since 2014, while Rosha has been working at HSBC for 30 years.

"HSBC suffered a slump after the Huawei affair. Although the bank is based in the UK, its business is rooted in the Asia-Pacific market, so it cannot afford to lose China," Hu Qimu, chief researcher at the Sinosteel Economic Research Institute, told the Global Times on Monday.

On the other hand, HSBC's UK background and its dependence on the Asia-Pacific market inevitably make it impossible for the bank to avoid the China-US game, Hu added.

According to its financial results, HSBC's profits slumped to $8.8 billion in 2020, down 34 percent year-on-year, which it attributed to COVID-19 and the difficult global economic situation.

The Asia region accounted for 46 percent of its total customer account value in 2020, while the UK accounted for 30 percent and North America 11 percent.

But analysts and observers said that the plunge in Asia was deepened by the criticism and controversy in China, although the bank denied having colluded with the US government to lay a trap for Huawei, which resulted in the arrest of Meng.

"HSBC cannot make money from Chinese customers while doing something that undermines China's national interests. Without making a substantial change, HSBC's performance in China is unlikely to improve," Hu noted.

In its financial results for the first quarter of 2021, HSBC forecast GDP growth of 8.4 percent in the Chinese mainland in 2021, along with growth of 4.4 percent for Hong Kong, 4.5 percent for the UK and 4.8 percent for the US.

The forecast shows the bank is bullish on the Chinese mainland's economic development.