Hong Kong: Growing geopolitical tensions and pulled IPOs have done little to damp the appetite of Western banks for Hong Kong and China.
Standard Chartered's CEO, Bill Winters, was the latest executive in recent weeks to signal a sweeping Chinese government crackdown and rising geopolitical tensions between China and the US won't derail his lender's focus and investment in the region.
"We don't see a structural or fundamental change in terms of the business opportunities for Standard Chartered," Winters said on a call with reporters Tuesday. Hong Kong's continuing role as a conduit into the Greater Bay Area mean "the opportunities for us in corporate banking and wealth management will be very, very substantial."
His comments echo that of other firms such as Citigroup, HSBC and Credit Suisse Group AG, who all used earnings to underline it's business as usual in Greater China. That comes despite a wide-ranging crackdown by Beijing on industries from its booming education industry to the technology sector as Xi Jinping's Communist Party tightens its grip on the world's second-largest economy.
The US Securities and Exchange Commission has halted Chinese companies IPOs in response.
The regulatory push is taking its toll on markets, with Hong Kong's benchmark stock index sliding 15 per cent from a high in February. Chinese technology giant Alibaba Group Holding missed sales estimates for the first time in more than two years in the three months ended in June.
At Standard Chartered, Asia was the bank's strongest region in the second quarter, with profit up 75 per cent to $1.01 billion, countering declines in Europe and the Americas. HSBC, which is moving several of its most senior executives to Asia, said Monday that risk-weighted assets in the region increased by 6 per cent from the start of the year.
"We're investing heavily in the market and investing heavily in China and the rest of the region," said HSBC CFO Ewen Stevenson in a Bloomberg Television interview. "We're very confident about the long-term macro trends in Hong Kong and the rest of Asia."
Citigroup's CFO, Mark Mason, said last week that China's recent moves to crack down on companies isn't likely to harm the bank's business across the Asia-Pacific region. Credit Suisse CEO Thomas Gottstein said that while recent events contribute to "a less predictable short-term situation," the firm sees "very strong and robust economic development not only in China, but in Asia, that we consider to be very attractive for our business models."
China's clampdown has even boosted business in the region. HSBC said Monday that the local capital markets had been given a boost by a shift in business from the US.
The bank said about a quarter of a $35 billion year-on-year increase in customer lending at its wealth and personal banking unit related to short-term loans in Hong Kong was linked to IPOs, where clients borrow money to fund their purchase of shares in the latest listings.