Augmenting Hong Kong Protests put HSBC Banks in Adverse Situation
Last updated on August 29th, 2020
Prolonged Hong Kong Protests have severely affected the functioning of not just the city but the entire economy of China. Financial institutions have become victims of enraged protestors. Established in Hong Kong in 1865, HSBC Banks were also under attacks earlier this week. The pair of bronze lions outside its Hong Kong headquarters had been painted red.
Hong Kong protestors accuse HSBC banks of working with Chinese authorities to cut off funding. The bank denied accusations describing the attack as one among the many other repeated “acts of vandalism” against its branches.
Seven indoor ATMs and two HSBC branches were shut yesterday. In a statement released on Thursday, HSBC Banks said that it has been working to restore services soon. Bank of China has also been affected by the Hong Kong protests, but HSBC escaped the mischief till late December.
As per reports, it was only after HSBC closed an account held by a non-profit group, Spark Alliance in November that the situation worsened. Angry protestors blame the bank for helping the cops with an investigation into suspected money laundering, which is seen as the main cause of the arrest of some Spark Alliance members on December 19.
As said by one protestor, “People are angry because they feel that HSBC has stopped money getting to the protesters.” In defence, HSBC said, “Our decision is completely unrelated to the Hong Kong Police’s arrest of the four individuals on 19 December 2019. We closed the account in November 2019 following direct instruction from the customer.”
Speaking of the impact of the protests, Former Managing Director at CLSA, Fraser Howie said, “It just goes to show how difficult it is to navigate the corporate world in Hong Kong at the moment because the protester wrath can turn on you.”
Despite the ongoing tensions, the Managing Director of VC Asset Management, Louis Tse Ming-Kwong remained optimistic that the incident will have minimal impact on the results of HSBC this year. Shares of HSBC recently improved by 10 cents or 1.3 percent, to $7.75 after 43,315 traded on the Bermuda Stock Exchange Index.
Meanwhile, the bank is working on its Middle Eastern business. Sources claim that HSBC UAE and Etihad Credit Insurance (ECI) have signed a Memorandum of Understanding (MOU) to help businesses and exporters gain easy access to global markets. The deal signed will provide them with a platform for sustainable growth and development.
The MOU was signed between Etihad Credit Insurance CEO, Massimo Falcioni and the UAE and Head of International of HSBC Banks, Abdulfattah Sharaf. The partnership will focus on areas including trade credit insurance tools, several financing solutions, bond support, corporate financing, exchange of industry trends and market insight.
Speaking about the deal, Sharaf said, “The UAE is the Middle East’s leading international trading hub and we see huge potential here, just as we did 73 years ago when we opened the country’s very first bank. We have supported the UAE’s economic development ever since and, as the world’s leading international bank, we look forward to working closely with ECI to help UAE exporters reach more customers around the world.”
As the Hong Kong protests are expected to become more violent in near future, it remains to be seen how HSBC will deal with such issues and maintain its stronghold in the Chinese market too.
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