Hong Kong's 20 largest licensed banks 2014

What’s new at Hong Kong’s biggest banks?

Hong Kong and Shanghai Banking Corp (HSBC) remains the largest licensed bank in the city, based on the number of employees with 29,000, according to Hong Kong Business’ second annual survey. This represents 9% growth from last year’s 26,712.

The number is expected to grow further this year as it opened a new building in Shek Mun in May.

Comprising 12 floors with a gross floor area of more than 42,000 square metres, HSBC Building Shek Mun houses a data centre to complement HSBC’s primary data centre in Tseung Kwan O. It provides world-class office space for up to 1,800 employees of various departments, complete with staff amenities to promote worklife balance, including mother-care rooms, prayer room, gym and a social lounge on the roof.

Sean O’Sullivan, Group Chief Operating Officer, HSBC, was quoted as saying, “The Shek Mun building represents the next generation of data servicing at HSBC and is a practical demonstration of how we’re reducing complexity and improving our operational excellence.”

Maintaining their rankings

All other banks in the list maintained their rankings from last year. Bank of China (BOC), which saw staff strength growing to 14,647 from last year’s 14,638, is ranked second. Recent media reports say that BOC is currently hiring traders and salespeople as it plans to set up a high-yield bondtrading platform in the city.

Hang Seng Bank, with 7,932 people, came in third. This is 200 more than last year.

Standard Chartered Bank (SCB) is in fourth place with a headcount of 6,000. SCB recently appointed May Tan as the bank’s first female chief executive in Hong Kong.

Our channel checks with analysts indicate that boosting weak profits will be a major challenge for Tan, who took on the top job at the start of July.

SCB’s major challenge

SCB’s 1H14 core operating profit plunged 20% YoY (USD3.3b). MayBank Kim Eng report that the lacklustre performance was due to a 20% YoY decline in Financial Markets income; a mid- to single-digit YoY decline in Retail Products income; and high-teens YoY increase in loan impairments. Moving forward, MayBank also cautions about the quality of commodity finance in China.

“SCB had USD250m in commodity-related exposure in Qingdao in Jun 2014. It is unclear whether SCB suffered from the recent alleged commodity-finance fraud of Decheng Group in Qingdao. We raise our credit cost forecast from 0.53% to 0.64% for 2014.”

Barclays agrees, while noting that some of the Hong Kong banks have already seen some credit quality deterioration here, although China overall remains a small part of Standard Chartered’s loan book.

Rounding out the top five is Hong Kong’s largest independent local bank with total consolidation assets of HK$754.0 billion as of end-2013, the Bank of East Asia (BEA). It employed 5,692 people in Hong Kong.

BEA’s opening of its new centre on the 33rd floor of Tower One at Times Square unveiled new look for its SupremeGold brand. To further strengthen its presence in Causeway Bay, BEA has opened two digital branches – one at the ifc mall in Central and the other on Level B3 at Times Square.

Altogether, the top five comprise 74% of the 85,841 total employment of the 20 largest banks in the list.