HSBC, StanChart Criticized HK Sec Law
Senior British politicians criticized HSBC and Standard Chartered on Thursday after they backed China’s national security law for Hong Kong. This was in conflict with the British government’s opposition to the proposed legislation.
In a break from their usual policy of political neutrality, the British banks on Wednesday expressed support for the law. This was even as it drew condemnation from Britain and revived anti-government demonstrations in Hong Kong’s Asian financial hub.
Shares in HSBC, which is Britain’s biggest bank, fell 1% in London, paring earlier gains in its Hong-Kong listed stocks. Standard Chartered rose slightly in London against a 1.2% drop in the FTSE 350 banks index (FTNMX8350).
HSBC customers posted on social media that they will close their accounts in response to its backing of Beijing. This was a message from people who said they were customers of this bank.
Both banks declined to comment though.
The reaction highlighted the predicament facing the two Britain-based banks. But with deep roots in China where they are trying to expand. That is when the country’s ruling party is clashing with Britain and the United States.
Hong Kong accounted for 90% of HSBC’s pre-tax profit and 41% of StanChart’s in 2019. This showed the importance of the Asian financial hub to the banks’ bottom line.
HSBC and StanChart’s Move Has Earned Much Criticism
Will Howlett, equity analyst at HSBC shareholder Quilter Cheviot said the outlook for HK clouded the case. China’s steps to impose greater control over the autonomous region also clouded it.
The Global Times said that the bank’s move should have come earlier. The People’s Daily publishes the newspaper, the official newspaper of China’s ruling Communist Party.
News from the stock market reported some of HSBC’s corporate peers including Cathay Pacific Airways faced retribution from Beijing. This was for the perceived support for the anti-government protesters.
HSBC backing comes after former HK leader Leung Chun-Ying criticized them for not making its stance clear on the law. He said that its China business could be replaced overnight by banks from China and other countries.
The U.S., Australia, and Canada have all criticized China for imposing the law on the former British colony.
Stock trading reports say some employees of both banks commented that business imperative was likely the reason for the support.
But the Hong Kong Finance General Employee Union has criticized the move. The group formed in September bringing together local financial professionals amid pro-democracy protests
Union Chairman Ka-Wing Kwok said the two UK banks will clarify if they are betraying Hong Kong people. This is while most of the governments from the western world are against this evil law and supporting HK people.
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