Hong Kong banks feeling the pain of losing transaction business as over 400 branches shut amid pandemic
Hong Kong banks are bearing the brunt of losing their over-the-counter transactions business as the widespread closure of branches amid the pandemic enters its second week, bankers and analysts say.
Twenty banks temporarily closed another 135 branches over the last seven days, bringing the total closures to 412 city-wide as of Saturday, based on a Post analysis of announcements by banks. This represents 37 per cent of the 1,100 local branches versus 25 per cent a week earlier.
HSBC has shut 50 branches while Bank of China (Hong Kong) closed 90 outlets - both amounting to half their network. Standard Chartered and other lenders have closed about 30 to 40 per cent of their branches.
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Hong Kong 'will be fine' Standard Chartered CEO says, won't move staff
Banks started closing some branches on February 7, after Hong Kong's fifth wave of Covid-19 began to escalate. The closures quickly doubled from about 200 in just two weeks as more staff became infected.
"Two weeks after closing about one-third of our bank branches, it is inevitable that some face-to-face business [transactions] have gone down," said Mary Huen Wai-yi, chief executive of Standard Chartered Bank Hong Kong. The hardest hit were transactions involving large sums and wealth management advisory services.
"Customers like to go to a branch to deposit or withdraw a large sum of money," she said during a post-results media briefing. "Customers also like to have face-to-face discussion with our investment advisers at the branch about their investment portfolios at the beginning of the year."
However, Huen said 90 per cent of retail banking transactions were now done online.
Standard Chartered, along with Hang Seng, ICBC Asia, Nanyang Commercial Bank, Bank of Communications Hong Kong, and Bank of East Asia have so far closed about 25 branches each as of Saturday, with no indication of a reopening time.
HSBC has temporarily shut 50 branches while Bank of China (Hong Kong) closed 90 outlets - both amounting to half their network. Photo: SCMP / Felix Wong alt=HSBC has temporarily shut 50 branches while Bank of China (Hong Kong) closed 90 outlets - both amounting to half their network. Photo: SCMP / Felix Wong>
CMB Wing Lung and Shanghai Commercial Bank have each closed 17 branches, while China Construction Bank Asia shut 15 and Public Bank Hong Kong closed 13.
"Such a massive closure of bank branches is set to continue as the outbreak has no sign of ending any time soon. The retail banking business will be hit hard," said Kenny Ng, a strategist at China Everbright Securities. "The outbreak also prevents people from going shopping and dining, so will also hurt the credit card business for banks."
The Hong Kong Monetary Authority said on Friday that it "strongly encouraged" banks to only allow staff with at least one vaccine shot into their workplace, or to have them tested regularly.
The recommendation came after a record number of new cases were reported in the city this month, which has seen more than 40,000 people become infected since the pandemic began, including dozens of bank employees.
Of the 50 HSBC branches that were closed, 17 were due to staff being infected while the remainder were shut as a precaution. The bank continues to serve customers through a combination of selected branches and digital channels, said Maggie Ng, head of wealth and personal banking for HSBC Hong Kong.
"In 2021 alone, we rolled out over 200 new digital features, including mobile account opening, global payment tracker, e-LaiSee, and mobile ATM withdrawal," Ng said. "Today, over 95 per cent of our retail transactions are conducted through online channels."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.
