HSBC Hong Kong Dependence

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HSBC Hong Kong Dependence

Hong Kong is HSBC's largest and most important market globally accounting for over 60% of its pre-tax income in 2018. Hong Kong accounted for $18.2 billion of HSBC'S $28.7 billion revenue in Asia in 2018, which is about one-third of the company's total global revenue. Below is an overview of our findings.

  • According to Wolf Street, Hong Kong is HSBC's largest and most important market globally generating about 75% of the bank's profits, together with China. Hong Kong is also HSBC most established market with the bank commanding over 25% of Hong Kong's HK$398 billion ($50.72 billion) banking revenue, reports Bloomberg.
  • According to HSBC's 2018 annual report, Hong Kong's wider and higher deposit margin was primarily responsible for the company's revenue growth by $1.7 billion (8%), $1.6 billion (12%), and $100 million (4%) in its Retail Banking and Wealth Management, Commercial Banking, and Global Private Banking businesses as of December 31, 2018, respectively.
  • According to SCMP, HSBC recorded over 1.5 million users/downloads for its Hong Kong PayMe app. Compared to the 200,000 downloads for the United Kingdom's Connected app, Hong Kong is HSBC's largest market for online banking. Additionally, the company's annual report states that there are about 3 million monthly transactions on the PayMe app.
  • According to HSBC's Asia Fact Book, Hong Kong accounted for $18.2 billion of HSBC'S $28.7 billion revenue in Asia in 2018. Considering that HSBC's global annual revenue in 2018 was $53.8 billion, then the Hong Kong business entities generates about one-third of the company's total revenue. Notably, Hong Kong accounted for over 60% of HSBC's pre-tax income in 2018.
  • Additionally, statements and actions by HSBC's leadership, as well as recent corporate communications, have indicated Hong Kong's importance to the company, for example, during the recent Hong Kong unrest, HSBC was the first to speak out among banks and it put up public peace adverts on the local media. HSBC called for a peaceful resolution since it is rooted in the city and any major slowdowns would have had far-reaching effects on its earnings. According to HSBC's 2018 Asia Fact Book, acceleration of its Asian revenue is dependent on increasing its reach and strength in Hong Kong.
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Sources