Global banking group HSBC has identified Malaysia as one of its seven priority markets in the Asia Pacific (Apac) that it will continue investing aggressively in amid a slowing world economy.
The Asia-focused group operates in 19 countries within the Apac.
“The priorities are Hong Kong, China, India, Malaysia, Singapore, Indonesia and Australia. These are countries in which we wish to continue to invest quite aggressively to build our businesses up,” group chief executive officer Stuart Gulliver, who was here on a two-day visit, told reporters yesterday.
Banking giants like HSBC have increasingly been looking to emerging markets like Asia for growth as economies in US and Europe falter.
In the first nine months of this year, emerging markets (EM) – Apac, Latin America and the Middle East – accounted for about three quarters of the group’s pre-tax profit as its businesses in the US and Europe made less money under the economic strain. It made a net profit of US$14.4 billion (RM45.4 billion) in that period.
Further down the road, if markets normalised, EMs would likely account for 60 per cent of the group’s pre-tax profit in five years’ time, Gulliver said.
He said the US is likely see muted growth next year while Europe will go through a recession. “That will have a knock-on impact in EMs but I don’t think it will cause EMs to go into a recession. Our forecast for Malaysia is 5 per cent economic growth – it still puts you in an environment where you’re creating job,” he said.
HSBC has been going through major changes since Gulliver, who began his career at the group some 32 years ago in Malaysia, took on the top spot in January.
He has sold unprofitable businesses and aims to cut 30,000 jobs by 2013 and create another 15,000 in EMs as part of a bigger plan to save up to US$3.5 billion (RM11 billion) in costs by that year. Its global headcount now stands at 300,000.
Stuart explained that the 30,000 job reduction
is not a “net” number as there also would be reallocation of work. “Net-net, I would be surprised if our headcount in two to three years was less than 270,000,” he remarked.
He assured that the group would continue hiring staff in Malaysia and the other priority countries.
He gave an assurance that the group would continue hiring in Malaysia and other priority countries.
While HSBC may sell off some of its businesses in Apac that don't generate sufficient returns, it has no plans for a sale in any of the Asean core countries like Malaysia, Singapore or Brunei, he said. "We have great profitable businesses in all of the Asean countries which we will continue to develop," he added.
Gulliver's visit to Malaysia, his first since becoming CEO, was to meet with key political and business leaders. It is something he plans to do once or twice a year, he said.
The group is keen to participate as the country develops infrastructure like high-speed railway links, and is particularly interested in Johor's Islandar region.
"We see a win-win situation from our ability to help provide capital and financing to the infrastructure build," he said.
The group expects to have 57 branches by year-end.