HSBC braced for grilling over Beijing links by key investors
HSBC is preparing to fend off a barrage of questions over its relationship with Beijing when it speaks to investors next week, as bosses fight to stay out of a diplomatic stand-off with the West.
Europe’s biggest bank is set for a grilling when it reports first-half results on Aug 3. At the weekend, the lender issued a statement via Chinese social media app WeChat denying claims it had tried to frame telecoms firm Huawei for breaking US sanctions following criticism in the communist regime’s propaganda outlets.
The bank insisted it did not “set traps to ensnare Huawei” and had no hostility towards the Chinese tech giant, which is being stripped out of 5G telecoms networks in the UK over security fears. State-controlled Global Times, which has been heavily critical of the bank, said HSBC’s response exposed the company’s “deathbed struggle”.
HSBC has also come under attack in the West for bowing to Chinese pressure over a security law which forbids dissent in Hong Kong. One major investor said the bank is likely to be quizzed on recent reports that its wealth managers are examining whether their Hong Kong clients have ties to the city’s pro-democracy movement.
The investor said: “That would be very hot if true.”
Major UK banks will report their first-half earnings over the next two weeks, starting with Barclays on Wednesday. John Cronin, a banks analyst at Goodbody, estimates that Barclays, Lloyds and NatWest Group will collectively take another £4bn hit from coronavirus over the second quarter as the lenders put extra money aside to cover for sour loans, with HSBC and Standard Chartered each putting aside another £1bn to £2bn.