HSBC forced to close Hong Kong branches as protests intensify
HSBC was forced to close branches and suspend some ATMs in Hong Kong on Thursday after the closure of an account used to raise funds for demonstrators led to the territory’s biggest bank being targeted for the first time.
Ten of its branches or ATMs were shut after undercover police carried out violent arrests of protesters who had turned their ire on HSBC following accusations it helped the police close an account held by Spark Alliance fund, a crowdsourcing operation.
The attacks on HSBC extended to the iconic bronze lions outside the bank’s Queen’s Road Central headquarters, which still bear bullet marks from fighting during the second world war when the territory fell to Japan in 1941. Their eyes were smeared with red paint, their crevices stuffed with pamphlets and one was lit on fire on Wednesday night.
The bank, which generates the vast majority of its profits in Asia, has attempted to remain neutral during the protests that began last year because of fears Beijing is threatening the independence of the former British colony. HSBC’s one intervention came in August when the bank took out full-page advertisements in local newspapers calling for a peaceful resolution to the crisis.
“It just goes to show how difficult it is to navigate the corporate world in Hong Kong at the moment because the protester wrath can turn on you,” said Fraser Howie, a former managing director at CLSA.
Protesters have designated some companies as “yellow” or supportive of the movement, and others as “blue” or backing the police and authorities.
HSBC has said the decision to close the account in November was for compliance reasons and came before the police intervention. Late last month, police arrested four people for money laundering and froze HK$70m ($9m) held by Spark Alliance, alleging some of the money had been misused to purchase personal insurance products.
Analysts said that being targeted is more of a public relations challenge for HSBC, rather than one that threatens profits — which are at greater risk from the trade war between the US and China. In October, the bank said in a quarterly update it had delivered a “resilient performance” in Hong Kong.
“HSBC is the bank of Hong Kong people . . . Now you betray Hong Kongers for the most terrifying communist party in the world,” said Teresa Lam, a 63-year-old administrator for a US private equity fund who dropped HK$500 into a fundraising box for the Spark Alliance on Wednesday. “This could not be forgiven.”
Louis Tse Ming-kwong, managing director of VC Asset Management, said that despite the unrest this week, the incident would have a “minimal” impact on HSBC’s results this year.
“For the last couple of years the contribution from Hong Kong is more than elsewhere within the group but if the trade war gradually settles I think HSBC will have enough strength to cover their business within greater China as well as regional markets,” said Mr Tse Ming-kwong.
HSBC said the bank was engaging conservation experts to advise on the repair of the lions.