HONG KONG – HSBC Holdings said it is targeting a ‘mid-teens’ return on tangible equity for its Asian operations amid pressure from its largest shareholder to improve margins.
Ping An Insurance Group has criticized the bank’s current model in Asia for being inefficient. The firm has focused specifically on the earnings of its Asian financiers, with a return of 10.5% in 2022 compared to an average return of 13.8% for its Asian peers, the company said. The company is also seeking a sole listing of HSBC’s Asian unit.
HSBC reiterated in a statement to the exchange on Monday that the group’s goal is to generate at least a 12% return from 2023 onwards. The Group is targeting high-single-digit property income growth and mid-single-digit loan growth over the medium to medium term. In the long run, yes, the statement said. HSBC also reiterated the importance of international networks.
CEO Noel Quinn said, “We are currently targeting Asian clients looking to trade and grow in markets in Europe, the Middle East and the Americas, and vice versa. We have an unparalleled international proposition to support.”
In a presentation, the financier said about 60% of its wholesale client business in Asia is cross-border.
HSBC is focused on Asia and has also sold businesses in other parts of the world. It reiterated its intention to invest about US$6 billion (S$8 billion) in Asia between 2021 and 2025.
The bank, which considers Hong Kong its largest market, is diversifying its presence in other markets in the region amid heightened geopolitical tensions.
“In addition to our core strength in Hong Kong, we now have growth drivers in mainland China, India, Singapore and elsewhere,” Quinn said.
Wealth is key to its Asian pivot, and the bank is ramping up its operations on the mainland, also aiming to launch a private banking operation in India in July.
The financiers said they will hold week-long seminars for investors and analysts in Hong Kong and Singapore to discuss their ambitions. Rival Standard Chartered is also holding meetings with investors this week.bloomberg
https://www.straitstimes.com/business/hsbc-targets-mid-teens-asia-returns-amid-ping-an-pressure HSBC targets ‘mid-teens’ returns from Asia under Ping An pressure