HSBC’s Guyett Defends China Stance, With Clients Seeking Answers

(Bloomberg) -- A top HSBC Holdings Plc executive sought to reassure clients and staff after the bank’s controversial support of China’s proposed security law in Hong Kong, saying that the escalating political rhetoric won’t diminish the appeal of the two markets.

The bank’s clients have raised the topic of Hong Kong in nearly every discussion in recent days, HSBC’s co-head of global banking and markets Greg Guyett said in an internal memo to colleagues, adding that he has addressed those concerns by pointing to HSBC’s role as a “bridge” between Asia and Western economies.

“China and the West will continue to have deep economic and trade relationships -- and Hong Kong will remain an important conduit given its robust markets and business framework,” Guyett said in the memo seen by Bloomberg News. HSBC confirmed the contents of the memo but did not comment further.

He also reiterated HSBC’s stance on the proposed Chinese security law, which the bank supported earlier this month. “We respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of one country, two systems,” he said.

The memo comes after HSBC’s stance prompted anger among U.K. and U.S. politicians. In London, senior figures from the opposition Labour Party said the positions of HSBC and Asia-focused rival Standard Chartered Plc were “completely at odds with the values framework in which financial institutions should be operating.” Jacob Rees-Mogg, the governing Conservatives’ house leader, has said HSBC may be more closely “aligned with the Chinese government than Her Majesty’s government.”

U.S. Secretary of State Michael Pompeo has criticized “corporate kowtows” in response to China’s proposals.

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