HSBC grooms top bankers for make-or-break push into China

Bloomberg

As HSBC Holdings pins its future on China, Europe’s largest bank is grooming a set of well-connected bankers to navigate its fraught relationship with Beijing in the long run.
David Liao and Mark Yunfeng Wang, heads of Asia Pacific global banking and its China operations, respectively, are among a handful of contenders in the running to steer HSBC’s expansion in the crucial mainland and Hong Kong markets.
Both are prominent in conversations about HSBC’s future as the lender kicks off an informal search to identify a successor for Peter Wong, its top Asia executive, they said, asking not to be named
discussing private matters. Wong has been pivotal to restoring the British bank’s standing in China after it faced censure for its role in a US probe of Huawei Technologies Co. and to helping it maneuver around fraying ties between the world’s two superpowers.
The 69-year-old Wong, who’s viewed as difficult to replace and has previously extended his tenure, is mentoring both Liao, 48, and Wang, 55, to strengthen the China bench ahead of his eventual retirement, the people said. The lender is casting a wide net both within its ranks and beyond, one of them said. HSBC declined to comment.
A seamless transition is crucial for the 156-year-old bank, which is hearkening back to its roots with a historical restructuring that will steer billions of dollars in capital towards Asia, while shrinking or exiting unprofitable US and European operations.
Central to this is capitalising on China’s burgeoning affluence and its plans to create an economic powerhouse by linking Hong Kong closer to mainland cities such as Shenzhen and Guangzhou in the Greater Bay Area.
Yet, the region’s complicated geopolitics have time and again tripped up the lender. It has faced criticism — and lost business — in China for cooperating with the investigation into Huawei, and been reprimanded in Washington and London over support for Beijing’s tough security law in Hong Kong. A successor will have to contend with a deepening Chinese crackdown in the financial hub, its biggest market, and any backlash from the incoming Biden administration.
“It’s important to have a local as the chief in the Asia region, particularly so in China with a complex culture,” said Tom Kirchmaier a professor at the Centre of Economic Performance at the London School of Economics. “Banking is also so much about networks that are much harder to build as a foreigner.”
Wong, a member of the Chinese People’s Political Consultative Conference, the nation’s top political-advisory body, nurtured relationships in Beijing during his five years as general manager of the bank’s China business.
Since taking on HSBC’s top position in Asia Pacific in 2010, he’s lobbied for an expansion in the Greater Bay Area and for maintaining a stake in Bank of Communications Co. as other global banks retreated. Souring relations with China since mid-2019 made Wong’s role more critical. He’s pushed headquarters for a faster response to Beijing’s concerns and was the man rolled out to publicly endorse the security law that China imposed on Hong Kong last year.
The situation is pressing as Chairman Mark Tucker, who manages relations with Beijing alongside Wong, has his contract coming up for renewal. Tucker has close ties to Hong Kong and China since his tenure at Prudential Plc, and flew to Beijing around four times a year before the coronavirus pandemic hit, one of the people said.