HSBC vows no layoffs after Hang Seng deal, says HK finance chief

HSBC Holdings has vowed to invest billions of dollars over the next few years and not conduct any layoffs as part of the lender’s proposed deal to take its troubled Hong Kong subsidiary private, according to the city’s top finance official.

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HSBC told the government that “substantial investment will be made” in the “billions of dollars” in Hong Kong and the region during its proposed privatisation of Hang Seng Bank, Financial Secretary Paul Chan said in an interview with Bloomberg Television.

The investment will be spent over the next few years in areas like customer services, technology and boosting the private wealth business, he added.

“According to what they have told us, there will be no layoffs,’ Mr Chan said.

The US$14 billion (S$18 billion) buyout proposal, announced last week, was a rare big bet by the London-based bank, which has largely avoided such major moves over the past decade.

The proposed deal has been widely seen as a response to Hang Seng’s high levels of bad debt, which HSBC has been pushing the subsidiary to offload. But HSBC chief executive officer Georges El-hedery rejected the connection, saying it is “very much” an investment for growth.