HSBC plans big China expansion

Taipei: HSBC Holdings is preparing to boost its China presence about 20 per cent next year, as it ramps up for an IPO in one of its fastest growing markets, a top company executive said.

Europe's biggest bank aims to open 15-20 new branches in China next year pending regulatory approval, up from the 90-100 it will have at the end of this year, Sandy Flockhart, Asia chief executive said in Taipei yesterday.

"We will be the largest international bank in China," Flockhart told reporters, following the bank's first board meeting in Taipei. "We will continue to invest in China in 2010."

HSBC has been among the most active foreign banks in China, where it earned a pre-tax profit of $752 million (Dh2.8 billion) in the first half of the year, accounting for about 15 per cent of the company's total. It competes there with the likes of Citigroup and Standard Chartered.

In addition to its own branch network, HSBC's China investments also include a 19 per cent stake in Bank of Communications, a 16.8 per cent stake in Ping An Insurance, and a 12 per cent stake in Industrial Bank.

HSBC said recently it would go to a dual-headquarters system in Hong Kong and London to emphasise the importance the bank places on Asia.

Last month, the bank said it was swinging its power base back to its place of birth 144 years ago by moving its chief executive to Hong Kong.

Flockhart said his bank, which posted a 50 per cent drop in first half profit, will focus its Asia acquisition strategy on China and other emerging markets as it increasingly relies on the region for growth.

To underscore the importance of China to its future, HSBC has become one of a handful of foreign companies to announce its intent to list in China when the country announces rules for such listings.