HSBC’s Asian expansion won’t trigger many relocations from Europe
If you work for HSBC in London, Paris or elsewhere in Europe, you may be eyeing up a relocation to Hong Kong or Singapore. HSBC’s planned 35,000 job cuts are focused on Western markets, which arguably makes an internal transfer to Asia – the region earmarked for growth under a new strategy announced in February – more enticing. HSBC wants to redeploy about $100bn in risk-weighted assets from Europe and the US to Asia, where it already makes about 90% of its profit, by 2022.
These eyewatering numbers mean that Hong Kong and Singapore remain potentially attractive destinations for HSBC staff looking to transfer over the next 12 months, despite the political turmoil in the former city, which HSBC was embroiled in after supporting the security law. A senior British expat employee at HSBC in Hong Kong says a lot of the “highly paid” people in his office are foreigners, and adds that many of his London colleagues would still move to Hong Kong, primarily for tax and lifestyle reasons.
The reality on the ground, however, is that securing such a transfer is getting more difficult during the pandemic. “Expatriations are almost suspended – they need very senior approvals now,” says a team head at HSBC in Hong Kong, referring to cost savings made necessary by Covid-19. The bank did not reply to a request to comment.
HSBC already has “plenty of local executives in Asia who can step up to guide the bank” as it expands in the region, says headhunter Jason Tan. “And its talent development programme is very strong,” he adds. The firm has a track record of moving people from Hong Kong into top jobs in China, as we reported yesterday.
Moreover, even if transferees from EMEA could potentially fill jobs in functions such as trading and technology, most London investment bankers would struggle to find work in Hong Kong without being able to converse with Chinese clients in Mandarin. Aspiring expats would likely be excluded from much of HSBC’s hiring drive in wealth management and private banking – 500 more staff are needed in Asia by 2022 – because they lack regional clients.
HSBC is not the only firm in Hong Kong clamping down on transfering and hiring staff from Western markets. Recruiters say the need for foreign talent is shrinking across the Hong Kong banking sector. While the supply of expat candidates has fallen over the past year because of Covid-19 and the city’s ongoing political crisis, the supply of expats still exceeds demand.
“Jobs here remain attractive for expat bankers, but the Hong Kong job market is localising, so bankers who have cultural and language competencies for the Asian region are becoming even more sought after. The bulk of hiring in Hong Kong at VP to MD comes from regional hires,” says Abimanu Jeyakumar, head of Selby Jennings for North Asia.
As Hong Kong’s future as a global banking hub is called into question by some commentators, China plans to integrate the territory into its own financial system, including via the upcoming wealth connect project that links cities across the Greater Bay Area. This trend could further weaken demand for expats and make internal transfers within HSBC even more difficult over the long term.