HSBC’s Top Asia Banker Backs China’s Hong Kong Security Law

(Bloomberg) -- HSBC Holdings Plc's top executive in Asia has come out in support of a controversial national security law drafted by China's central government for Hong Kong.

Peter Wong signed a petition in support of China's proposed security legislation, according to comments posted on the bank's official WeChat account. The lender supports rules that stabilize Hong Kong's social order and revitalize the economy under the “one country, two systems” principle, the post read.

“We reiterate that we respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy,” it said. These are HSBC's first public comments on the topic after Hong Kong's former chief executive, Leung Chun-ying, lambasted the global lender for not publicly voicing its support for China's plan to enact national security legislation in the city.

HSBC is not the first firm to back Beijing but is in a uniquely delicate position. Most of its earnings are generated in Asia but its headquarters are in London, where the British government has backed its former colony. Prime Minister Boris Johnson has said he will give as many as three million Hong Kong residents the chance to seek refuge and a new life in the U.K. if China presses ahead.

“There is an element of HSBC trying to run with the herd and hunt with the hounds here,” said Alistair Carmichael, chairman of the U.K. legislature's All-Party Parliamentary Group on Hong Kong. “I've no doubt that this is seen as an economic or financial decision; they will see the benefit of trying to stay close to China.”

Major businesses including Jardine Matheson Holdings Ltd. and billionaire Li Ka-shing have come out in support of China's proposals in recent weeks.

HSBC drew the ire of Hong Kong's anti-government campaigners in the unrest last year, with its branches vandalized after it closed an account linked to the protests. While HSBC had cited inconsistent activity in the account that it closed down, its motives were questioned at a time when it's pushing into China and repairing its relationship with Beijing, having cooperated in the U.S. probe of Huawei Technologies Co.

At the behest of U.K. regulators, London-based, Asia-focused HSBC earlier this year canceled its dividend, angering key investors in Hong Kong. Its chief executive officer Noel Quinn, has also been forced to delay key parts of a restructuring program announced in February, which included about 35,000 job cuts, combining business areas and an accelerated shift to Asia to lift profit.

The region accounted for about half of the bank's revenue in 2019 and contributed almost all of its operating profit, more than enough to offset losses in Europe. Among the bank's growth spots are the region around Hong Kong, Macau and Guangzhou, along with wholesale banking in Southeast Asia and wealth management.

With assistance from Bloomberg