Economy

ALEX BRUMMER – HSBC boss goes missing

ALEX BRUMMER: HSBC boss is missing – Mark Tucker needs to come out of the shadows and explain to everyone exactly what is happening on the bench

  • Unacceptable that the chairman is so far from the action in a time of change
  • Closing a quarter of stores shows that it is rushing to cut costs
  • HSBC also poised to lay off 15% of its 2,000 senior operations staff worldwide

HSBC is much more than just a British bank. Due to its origin, it has central bank-like functions in Hong Kong. It acts as the commercial bank for Western companies that shift trillions of dollars between Hong Kong, New York and London every year.

That alone is why it makes sense to resist pressure from its largest investor Ping An, with an 8.3 percent stake, to spin off its Asian operations from the other 60 territories in which it operates. .

Chief executive Noel Quinn acknowledges that HSBC has given serious consideration to Ping An’s proposal. He does not believe the Guangdong-based insurer is Beijing-driven. Anyone who sees how Chinese leader Xi Jinping has gone backwards in terms of Hong Kong freedoms and Western capitalism might think otherwise.

Under pressure: It is unacceptable for the chairman of a bank headquartered in Canary Wharf and regulated in London to be so far from the action in a time of change

The activist shareholder exerts enormous influence. This week’s £8.3bn sale of HSBC’s Canadian arm to the Royal Bank of Canada appears to be another routine sale.

But the Canadian arm is not part of a rejected imperial strategy. It was focused on Vancouver and originally served the expatriate Hong Kong and Chinese communities. Sale Canada shows how seriously Quinn takes the Ping An threat.

It has been a week of hectic activities. In the UK, HSBC showed a willingness to sacrifice customer loyalty and service in the name of cost savings.

The closure of a quarter of its stores, which has reduced its footprint to 327 outlets, shows that it is scrambling to reduce costs. A better equipped branch network can undoubtedly be an asset in the digital age. HSBC is also poised to lay off 15 percent of its 2,000 senior operations staff worldwide. This is perhaps understandable as it damages overseas interests, with New Zealand lining up for the chop.

If the changes come with investment in fintech, in the fashion of global rival JP Morgan, that could be compelling. The concern is that Quinn acts impulsively despite pressure from Ping An.

In the midst of the revolution, now would be the time for Chairman Mark Tucker to come out of the shadows in New York and explain to investors, clients and colleagues exactly what is happening.

It is unacceptable that the chairman of a bank headquartered in Canary Wharf and regulated in London should be so far from the action in a time of change.

Sitting on the couch should not be an option for the robust former professional football player.

Spoils of war

The Ukraine conflict is BP’s latest embarrassment after controversies over ‘ATM’ surpluses, windfall taxes and climate change.

Chief executive Bernard Looney must admit that public sympathy for Russia’s war against Ukraine lies in Kiev. Therefore, the UK is Ukraine’s second largest military financier after the US. But what to do?

BP was quick to cut financial ties with oil giant Rosneft as soon as war broke out, writing off its £20bn stake.

Still, there’s little clarity on where those shares now sit and who took control of BP’s £580m ‘blood money’ dividend. BP should at least publicly commit that if the money can be released (it’s not clear how), it would contribute to Ukraine’s clear need to rebuild its domestic energy structure. By focusing on BP, President Zelensky’s economic adviser opens a broader front.

The London Stock Exchange moved quickly to suspend trading in Russian stocks, such as steel and mining giant Evraz, at the outbreak of war.

Payouts from these companies should go to Western investors, among others.

The country and Ukraine deserve clarity on where the proceeds are held and what the final destination is.

Spy school

Who couldn’t help but be aware of the mismatch in the UK labor market between the more than 1.2 million job openings and the roughly 625,000 citizens who have joined the economically inactive since the pandemic?

Those looking for adventure should check out an advertisement in the current issue of The Economist magazine for the Secret Intelligence Service (MI6). There are promises of living abroad, learning about other cultures and ‘tailor-made training’.

The fine print states that candidates who disclose their application to others will be disqualified. Tough love!

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Jacky

The author of what'snew2day.com is dedicated to keeping you up-to-date on the latest news and information.

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