GBA@5: HSBC, Bank of East Asia among Hong Kong lenders cranking up Qianhai presence with eye on growth opportunities

GBA@5: HSBC, Bank of East Asia among Hong Kong lenders cranking up Qianhai presence with eye on growth opportunities

GBA@5: HSBC, Bank of East Asia among Hong Kong lenders cranking up Qianhai presence with eye on growth opportunities

“HSBC has been actively participating in Qianhai’s financial pilot schemes since the beginning, and we were one of the first banks to participate in yuan cross-border lending and the Wealth Management Connect scheme,” Chan told the Post. The scheme, tailor-made for the bay area, allows residents from its nine mainland cities to buy investment products in Hong Kong through banks, while Hong Kong and Macau investors can also buy mainland investment products.

Qianhai offers incentives such as a 15 per cent corporate tax, which is lower than the 25 per cent charged in mainland China. Such measures have attracted major Hong Kong banks to invest in grade-A office buildings, and to develop a wide range of banking, securities and insurance businesses in the area.

Hong Kong is, in fact, a big contributor and had invested a total of US$4.9 billion in Qianhai as of July last year, accounting for 95 per cent of the special zone’s total foreign investment, government data shows. Moreover, the area is already home to about 10,000 Hong Kong companies, and more than 75,000 Hong Kong residents live and work there.

Hong Kong firms show increased interest in Qianhai office space, JLL says

“We are committed to enhancing our strengths so as to contribute to the development of the GBA into a financial hub, and will continue to play our part in financing opening measures in Qianhai,” Chan said.

In 2022, HSBC raised its stake in HSBC Qianhai Securities to 90 per cent from 51 per cent, and took full ownership of HSBC Life China in 2020, which Chan said reflects the bank’s commitment to developing China’s rapidly growing capital markets.

Meanwhile, Bank of East Asia (BEA), Hong Kong’s oldest family-run bank, opened an 18-storey building in Qianhai in January, as part of its push targeting wealth management and fintech in the bay area.
From left, BEA’s co-CEO Adrian Li, its deputy chairman, Arthur Li, Hong Kong Financial Secretary Paul Chan, BEA’s Asia executive chairman David Li, and its co-CEO Brian Li, are seen at the inauguration of BEA Tower in Qianhai, in this file photo from January, 2024. Photo: Enoch Yiu

“The inauguration of BEA Tower represents a milestone for our business development in the region,” Adrian Li Man-kiu, the bank’s co-CEO, said at the inauguration ceremony.

BEA has invested 1.4 billion yuan (US$194.6 million) to develop the grade-A building, which serves as its southern China headquarters. BEA’s mainland headquarters are in Shanghai.

Li said the new offices, with a gross floor area of 460,000 sq ft, houses the bank’s Qianhai branch and also a fintech innovation centre called Beast – which refers to BEA and start-ups – that supports innovative companies in Qianhai and Shenzhen.

BEA Tower in Qianhai. Photo: Enoch Yiu
Hang Seng Bank, a subsidiary of HSBC, set up Hang Seng Qianhai Fund Management in 2016 as the first non-mainland majority owned joint-venture public fund company in mainland China. Hang Seng owns 70 per cent of the fund company while Qianhai Financial Holding, the financial arm of Qianhai city’s regulator, owns the rest, according to a company announcement in 2016.

As of the fourth quarter of 2023, Hang Seng Qianhai Fund Management has managed 20 public funds and 19 segregated account products.

Standard Chartered, as well as Bank of China (Hong Kong), the city’s two other note-issuing banks, both offer a wide range of banking and cross-border financial services for customers who want to set up businesses in Qianhai.

Bay area special zones to speed up tax, legal incentives for offshore funds

Qianhai Mercantile Exchange (QME), the commodities trading arm of bourse operator Hong Kong Exchanges and Clearing, officially debuted in October 2018 with alumina trading. The exchange, in May last year, said it was studying the possibility of offering investors the chance to buy and sell spot contracts in lithium carbonate, nickel sulphate and cobalt, said Dong Feng, QME’s general manager.

Qianhai, as well as the city of Nansha, will set up service centres for Hong Kong insurance companies for mainland customers who have bought insurance policies in Hong Kong, according to insurers. However, the launch date of the centres has not yet been announced.

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