(Bloomberg) — HSBC Holdings Plc hit out at unspecified “internet rumors’ in China, pledging to continue to invest and support the Chinese economy as tensions grow.
In a statement on its official WeChat account on Friday, the bank urged the Chinese public to “reasonably” consider and assess its positive role as an international bank in the development of China’s market. “We have noticed some misleading rumors on HSBC recently, which are unfounded,” the London-based bank said.
“For over 150 years, we have been deeply rooted in China and have never stopped servicing the mainland,” the lender said. “Since the reform and opening more than 40 years ago, HSBC has been a steadfast backer of and active participant in China’s economic and social development.”
The comments came after HSBC this month publicly voiced its support for a new security law China is planning to enact in Hong Kong after pressure from officials and Chinese media. That decision has drawn fierce criticism from one of its largest shareholders and also opened up internal fault lines at the lender, with some Hong Kong employees chafing at the move.
HSBC rose 0.7% as of 2:33 p.m. in Hong Kong. The shares are down 39% this year, compared with a 12% loss in the benchmark Hang Seng Index.
Local Chinese website Guancha.cn reported Thursday that HSBC’s current layoff plan means that the “embattled British bank” may put an end to its China business, citing an unidentified “observer” from China. Shanghai-based Guancha.cn, which called itself an “online news and comments aggregator,” covers a range of topics from politics to technology. The article was later carried by other local news websites.
A day earlier, HSBC had announced it would revive a massive cost reduction plan that had been put on halt due to the virus. The plan, which includes cutting 35,000 jobs globally, is part of a move by HSBC to pivot more of its business to Asia.
Read more: HSBC walks a tightrope in China
The “observer” was also quoted as saying that HSBC may be prosecuted in China and eventually be expelled from the market as the bank “shamelessly” colluded with the U.S. government to suppress Huawei Technologies Co.
HSBC has worked hard to repair its relationship with Beijing after cooperating with the U.S. probe of Huawei.
Asia accounted for about half of the bank’s revenue in 2019 and 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.
Over the years, HSBC has ramped up its investment across financial sectors in China including commercial banking, credit cards, investment banking and wealth management. The bank now employs more than 8,000 staff in about 170 outlets across China, according to its website.
But it still faces a tightrope in China. Even after its public support for the security legislation, official media said HSBC will need to toe the line to keep its expansion in China on track.
“We still need to watch HSBC’s moves in the future,” according to a commentary in the Global Times, a Communist Party tabloid. “There’s a bottom line that HSBC can’t cross, otherwise the bank could lose the China market.”
(Updates with shares in the fifth paragraph and details on Chinese report in the sixth paragraph.)
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