HSBC Expands Green Finance Teams in China Amid Rising Demand

HSBC, the largest bank in Europe, is bolstering its green finance and bond teams in China to meet the growing demand for sustainable investments, according to insider sources cited by Reuters.

Despite geopolitical tensions, HSBC continues its expansion in China, with Chairman Mark Tucker recently meeting Chinese regulatory officials in Beijing to discuss accelerating the bank's growth in the country, including its presence in the rapidly expanding $3.9 trillion fund market.

Tucker highlighted the "ice-breaking" spirit historically adopted by British businesses as a means to overcome challenges and geopolitical tensions between the UK and China, as stated in a bank statement released on Wednesday.

Under pressure from its largest Chinese investor, Ping An Insurance, HSBC has committed to strengthening its profitable Asia business while divesting underperforming units in other regions.

As part of its efforts, HSBC plans to make significant investments in its asset management arm in China this year, including the establishment of dedicated teams for green assets and fixed income. The exact amount of investment has not been disclosed.

HSBC is also exploring the possibility of offering carbon offsetting products to customers following a surge in client inquiries over the past year. The bank has observed particular interest from Western multinational companies facing pressure to meet strict emissions targets.

Climate transition has become a pressing issue for domestic Chinese firms as well. China, the world's largest greenhouse gas emitter, witnessed a significant increase in climate fund assets after President Xi Jinping announced the country's commitment to achieving "carbon neutrality" by 2060. These funds have amassed approximately $34 billion in assets as of September last year, according to Morningstar data.

Despite criticism from some Western lawmakers regarding HSBC's conduct in the region, the bank has continued to expand in China. During meetings with Beijing officials, Tucker discussed HSBC's plans for growth in asset and wealth management. The municipal government stated that foreign participation in green finance is welcomed.

HSBC's CEO Noel Quinn also visited Beijing earlier this year, where a senior official expressed China's openness to HSBC's expanded investment in the country.

The recent takeover of Credit Suisse by UBS presents opportunities for competitors to expand their market share in asset and wealth management in Asia, according to the sources.

HSBC recently stated its openness to opportunities for business expansion in China after its local partner put a 31% stake in its HSBC Jintrust Fund Management joint venture up for sale.

In line with its commitment to green finance, HSBC acquired Hong Kong-based specialist asset manager Green Transition Partners in January. The bank aims to expand its green infrastructure services across the Asia-Pacific region.

HSBC's move to strengthen its green finance teams in China demonstrates its dedication to sustainable finance and aligns with the growing demand for environmentally responsible investment options. By positioning itself as a leader in sustainable finance, HSBC aims to support China's ambitious climate goals and capitalize on the increasing interest in green investments.

By fLEXI tEAM