HSBC has three-year head start on foreign investment banking rivals in China - Gulliver

HSBC has a three-year head start on its foreign investment banking rivals in China because of the British bank’s unique position of having management control of its securities venture there, chief executive Stuart Gulliver said on Thursday. 

 

Gulliver’s comments come after Beijing, in a surprise move last month, announced it will allow foreigners to control their onshore operations. Currently non-Chinese groups are limited to 49 per cent stakes in joint ventures in the fast-growing market. 

HSBC’s 51 percent control of HSBC Qianhai Securities is unique because it was able to use its long-established Hong Kong unit to take advantage of a rule favoring banks based in the city. 

Many international banks are keen to launch new Chinese ventures with majority control or to boost their stakes in existing partnerships to help integrate those operations with their global networks and to better manage reputation risk, bankers have said.

But it will be some years before things fall into place for foreign majority-owned ventures to kick off, according to HSBC’s CEO.