HSBC to Build Its Green Finance And Bond Teams In China

HSBC is building its green finance and bond teams in China to meet the surging demands. Europe’s biggest bank presses on with the expansion in the country despite geopolitical tensions.

Mark Tucker, HSBC chairman met the Chinese regulatory officials in Beijing last week to pave the way for the bank to accelerate growth in China, including in the country’s fast-growing $3.9 trillion fund market.

Tucker told officials an “ice-breaking” spirit adopted the British businesses historically would help the UK and Chine overcome their challenges and geopolitical tensions, said as per the bank statement published on Wednesday.

HSBC has committed to bolstering the money-spinning Asia business and shedding under-performing units elsewhere after being under pressure from the biggest Chinese investor Ping Insurance, to prioritize the region.

HSBC will make necessary investments in its asset management arm in China this year, including launching new teams dedicated to green assets and fixed income, the first of the two sources and a third source said. 

The lender is currently exploring offering carbon-offsetting products to customers after a surge in client queries over the past year, as informed by the second source, particularly from Western multinational companies under pressure to meet the strict emissions target. HSBC declined to comment.

Chinese transformation has also become a pressing issue for domestic Chinese firms. The world’s biggest greenhouse gas emitter saw the climate fund assets soar from a small base after President Xi Jinping said China would reach “carbon neutrality” by 2060. Such funds have garnered $34 billion in assets as of September last year.

HSBC has stepped up expansion in China despite criticism from some lawmakers in the West of the bank’s conduct in the region. HSBC’s Tucker discussed the bank’s planned growth in asset and wealth management in the meetings with Beijing officials, as per a release from the Municipal government which added that foreign participation in green finance was welcome.

HSBC CEO Noel Quinn visited Beijing in March for the first time after the COVID-19 outbreak when a top official told him “China welcomed an expansion of HSBC’s investment in the country”.

The demise of Credit Suisse as an independent bank after the emergency takeover by the rival UBS earlier this year presents opportunities for rivals to grow market share in asset and wealth management in Asia.

UBS halted the plans to set up a new fund unit in China and decided to maintain ownership in a mega fund joint venture from the Credit Suisse takeover.

HSBC said last week that it was “open to opportunities” to expand businesses in China after the local partner put a 31% stake in its HSBC Jintrust Fund Management joint venture on the block.

HSBC’s new fixed-income team in China initially comprised five staff and in response to growing client demand for bonds. HSBC’s green finance push builds on its acquisition of Hong Kong-based specialist asset manager Green Transition Partners in January when the bank said that it planned to grow its green infrastructure services across the Asia-Pacific region.

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