HSBC taps consumer banker to head China operation

HSBC taps consumer banker to head China operation

Dow Jones
Shanghai

HSBC Holdings Plc. plans to install a retail banker as head of
its China business, reflecting how foreign banks are redirecting
their focus toward consumers in the world's most populous nation.

Bank sources over the weekend said P. Dicky Yip, a senior
executive in HSBC's Hongkong and Shanghai Banking Corp. consumer
banking division, is slated to become chief executive for China
business.

"The position is being planned, and is subject to approval by
the (Hongkong Bank) board," Yip confirmed in a brief telephone
interview on Sunday. He declined further comment.

Bank spokespeople in Shanghai and Hong Kong couldn't be
reached. The staffing change in China follows the rotation of top
bank officers in other Asian countries, including India and
Malaysia.

Eddie Wang, who has been chief China representative since the
bank moved its China division to Shanghai from Hong Kong in May
2000, is expected to take an HSBC position in the U.S. He
couldn't be reached Sunday.

When China joined the World Trade Organization in late 2001,
terms called on Beijing to offer foreign banks full access to its
consumers in five years. HSBC has said repeatedly it expects
China to fulfill its commitment.

Global banking heavyweights such as Standard Chartered Bank
and Citigroup Inc.'s Citibank have increasingly adjusted their
China operations toward retail banking, according to analysts.

Yip's background in Hong Kong's ultra-competitive consumer
banking market - he is senior executive and deputy head of
personal financial services - is just the latest sign that the
HSBC group too is looking forward to the day it can do more
business directly with China's consumers in the local currency.

Yip's duties in Hong Kong involved him in Hongkong Bank's
retirement fund business and the controversial adjustment of
account fees in the late 1990s. He previously managed the bank's
U.S. West Coast operations in the mid-1980s.

"This is a golden opportunity to go into the local (consumer)
market," Wang, the outgoing country head, said earlier this
month. "We are moving toward a fuller opening of the market."

Wang spoke at an unveiling of HSBC's "premier" banking service
in Shanghai, which is aimed at attracting deposits from rich
Chinese.

Such services don't go far toward reaching the average
Chinese. HSBC's "premier" banking is primarily geared toward
those who can maintain foreign currency balances of US$50,000 and
have access to an HSBC outlet in Shanghai.

HSBC's nine branches and two representative offices in China
do most of their business with foreign companies operating in the
country, and don't yet figure very prominently in the books of
HSBC.

Although it has never broken out details of its mainland China
business, HSBC is one of the world's biggest banking groups, with
operations spanning the globe. It reported global pretax earnings
of US$5.46 billion in the year to June.

Full Chinese consumer banking may be sometime away for HSBC
but the planned change in its China command is highly symbolic
for the bank group, which sees the country as a huge future
growth market.

HSBC also takes pride in Shanghai roots that date to 1865 and
the fact that it operates from one of the most prominent
addresses in the city's modern Pudong financial district.

HSBC's recent strategy in China also involves the purchase of
strategic minority stakes in local financial services firms. It
bought 8.0 percent of the local Bank of Shanghai commercial last
year and is negotiating a similar-sized stake China's second-
largest insurer, Shenzhen-based Ping An Insurance Co. of China
Ltd.

It also has local-currency payment alliances with the
country's four biggest state-owned banks.