Hong Kong’s rich open foreign bank accounts amid unrest


Thousands of Hong Kong’s rich residents are opening bank accounts in Singapore and different monetary centres, as they make contingency plans to guard themselves in opposition to a protracted interval of unrest within the territory.

UBS, HSBC, Pictet and Credit Suisse are among the many banks to have had a pointy enhance in Hong Kong prospects opening abroad accounts, in response to folks accustomed to the matter. The pattern has accelerated because the mass protests over Beijing’s risk to Hong Kong’s independence proceed for a fourth month, they are saying.

One European bank has seen an increase in account openings, however lower than 1 per cent of deposits held by its Hong Kong prospects have really moved, in response to an government briefed on the matter. “Hong Kong’s loss is Asean’s gain,” they mentioned.

Another government mentioned that they had informed Carrie Lam, Hong Kong’s chief government, concerning the pattern, warning that the monetary hub risked seeing capital flight if the stand-off between the protesters and the Beijing-backed native authorities was not resolved quickly. However, they mentioned little money had really left, with rich shoppers positioning themselves for the worst.

Meanwhile, an government at a Singaporean bank with operations in Hong Kong mentioned extra accounts have been opened within the final three months than ever earlier than, with the majority being medium-sized accounts which generally vary from S$1 to S$2m. 

Singapore: One bank within the metropolis state mentioned functions from Hong Kongers for accounts had skyrocketed up to now three months © AFP through Getty Images

Sparked by the introduction in June of a invoice that may have allowed suspects to be extradited to mainland China for the primary time, the protests have thrown Hong Kong’s future into doubt simply because the US-China commerce battle saps its financial system.

In August, retail gross sales fell by a file quantity for a single month, whereas guests to town plunged 40 per cent. Earlier this week, the IMF slashed its 2019 progress forecast for the territory to zero.three per cent, down from a 2.7 per cent projection made in April.

Ms Lam mentioned on Wednesday that Hong Kong had entered a “technical recession”, as pro-democracy protesters compelled her annual coverage speech to be suspended.

Losing the cash and confidence of a few of its richest residents, in addition to the higher echelons of the center class, would exacerbate the downturn and threaten its place as Asia’s premier monetary centre.

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“European cities had been losing ground to Hong Kong for years, but that situation is reversing now,” one bank government informed the FT. “There is now a lot of interest in shifting money out of Hong Kong.”

“We are just at the first stages, people are enquiring and . . . [some] are opening accounts in Singapore, but not moving their cash just yet,” they added. “Also, London and Switzerland are not looking such bad places to move money, despite Brexit, considering all the Asia turmoil at the margins.”

The government on the Singaporean bank mentioned that three months in the past it was receiving about 80 functions a month to open accounts from quite a lot of shoppers, from the decrease finish as much as personal banking stage. But the variety of functions has skyrocketed, pushed primarily by Hong Kong-based shoppers seeking to hedge themselves in opposition to an intensification of the unrest, they mentioned.

Wednesday, 16 October, 2019

In August, the bank obtained 400 functions to open accounts, taking the overall this yr to about 600. So far, about 75 to 80 per cent of functions have translated into consideration openings, provided that the bank wants to finish know-your-customer and due diligence procedures, the chief mentioned.

Only just a few Hong Kong shoppers — lots of whom already had a relationship with the bank — have transferred cash into these new Singapore accounts since protests kicked off, for a complete of about S$300-400m, the banker mentioned.

Private banking shoppers don’t account for the majority of those new openings provided that they have an inclination to have already got a community of accounts with completely different banking establishments, the chief mentioned.

Spokespeople for the 4 banks declined to remark.

Foreign banks, desirous to make inroads into China’s fast-growing financial system, have needed to tread rigorously when coping with its authorities. UBS was compelled to droop one among its senior economists over the summer season when he made remarks referring to a bout of swine fever in China that had been interpreted as insulting. He has since been reinstated and returned to work.

Additional reporting by George Hammond in Hong Kong


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