HSBC

HSBC plans to step up its investment in Asia, including China, as the Hong Kong Special Administrative Region's contribution to the group's total profits rose to 60 percent in the latest quarter.

"We intend to reduce capital and costs in our underperforming businesses to enable continued investment in businesses with stronger returns and growth prospects … including in all our businesses in Asia," the bank said in a press release on Tuesday.

The group said it also intends to strengthen its investment banking capabilities in Asia and the Middle East.

The decision came as its businesses in US and EU markets underperformed in 2019, while those in the the Chinese mainland and India, among other regions, performed well.

It reported profits of $6 billion in 2019, slumping 53 percent year-on-year.

Although HSBC is based in London, most of its profits come from Asia, particularly Hong Kong. According to the bank's financial results for the fourth quarter of 2019, adjusted profits before tax in Hong Kong hit $2.6 billion, accounting for almost 60 percent of the group's total during the period.

Though in close association with China, HSBC has lowered its expectations for 2020 growth in the Asian economy due to the outbreak of COVID-19.

The economic slowdown may impact HSBC's expected credit losses in Hong Kong and the Chinese mainland, Group Chief Executive Noel Quinn was quoted to have said in a press release. "Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains," he said.

However, the main impact will be in the first quarter, but some improvement is expected as the virus becomes contained, according to HSBC.

Chinese experts told the Global Times in recent interviews that the impact of the outbreak on China's economy will be temporary and limited, as manufacturing will make up for losses by increasing work hours and consumption is expected to rebound sharply following the containment of the virus.

Global Times