HSBC, Hong Kong’s biggest lender, records increased deposits, loans in first quarter despite temporary closure of branches
- The lender’s first-quarter personal loan drawdowns are expected to jump 50 per cent from a year ago, despite having up to 70 per cent of branches closed
- HSBC is among 20 major local banks that temporarily closed various branches from early February because of the latest Covid-19 outbreak
The bank’s first-quarter personal loan drawdowns are expected to jump 50 per cent from a year ago, while deposits are estimated to rise by 5 per cent, according to Maggie Ng, head of wealth and personal banking at the Hong Kong office of HSBC.
“Since many of our staff and customers have been working from home amid the pandemic, we have provided a lot of digital tools and support so they can conduct banking transactions at home,” Ng said in a small group interview.
“It is like turning their homes into branches. This is why we can continue to serve our customers with the banking services they need even when we had to close up to 70 per cent of our branches early in March.”
The bank’s other businesses, however, have been hit hard by the closure of many branches. HSBC’s insurance sales in the first quarter are expected to see a 10 per cent decrease from a year earlier, while sales of wealth management products are also expected to post a decline, according to Ng, without providing details.
Hong Kong's bank branch closures as of March 25
| Bank | Number of Branch Closures |
| HSBC | 50 |
| Hang Seng Bank | 21 |
| BOCHK | 89 |
| Standard Chartered | 25 |
| Bank of East Asia | 17 |
| ICBC Asia | 13 |
| CCB Asia | 19 |
| OCBC Wing Hang | 14 |
| CMB Wing Lung | 12 |
| Shanghai Commercial Bank | 18 |
| China Citic Bank | 10 |
| Bank of Communications HK | 16 |
| Chiyu Bank | 13 |
| Nangyang Commercial Bank | 19 |
| Fubon Bank | 4 |
| Citibank | 4 |
Sources: Hong Kong Association of Banks and individual banks
“The decline in wealth management sales was not only because of the closure of branches, but also owing to market volatility such as the rise in US interest rates and worries about an economic downturn amid Covid-19,” she said.
The lender’s positive first-quarter performance in deposits and loans was a rare bright spot for the industry during the period, which saw the most number of bank branches ever closed in Hong Kong, outside public holidays and during typhoon landfalls.
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Hong Kong’s 20 major lenders temporarily closed about 200 branches from February 7, the number of which jumped to more than 600 in early March because of safety concerns or Covid-19 infections among employees. That number has steadily decreased in the past two weeks, as new infections across the city declined.
HSBC has divided its 100 local branches into two groups and let each open on alternative days during the week, which means about 50 branches are open every day. Ng said that arrangement would make it easier for customers to prepare on which days to visit a branch. Nanyang Commercial Bank and Chiyu Bank have adopted a similar arrangement for their respective branch networks.
Bank of China (Hong Kong) closed 89 branches, or about half of its local network, which is the most among all banks in the city. Most banks, except HSBC, suspended Saturday branch services until further notice.
Ng said HSBC has provided more online channels for customers. Since March 23, the lender has enabled customers to use its mobile banking app to scan the image of cheques to be deposited in their accounts, so there is no need for in-person branch visits. Last month, the bank also allowed customers to use a QR code to withdraw cash at ATMs, while its wealth management team can use online meetings tools to help customers make investments.
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HSBC currently has 1.7 million active mobile banking customers in the city, which are expected to grow to about 2 million by the end of this year. About 95 per cent of all retail transactions of HSBC in Hong Kong are now conducted online, according to Ng.
Citibank, which has four branches temporarily closed as of Friday, recently found 85 per cent of its customers manage their wealth through digital channels amid the branch closures. It also found the amount of digital fund transfers and bill payments increased by about 30 per cent in 2021 from a year earlier, according to a Citibank spokeswoman.
OCBC Wing Hang Bank, which has 14 branches closed as of Friday, expected its business performance to progressively catch up, according to Amos Chan, head of the lender’s retail banking group.
