KUALA LUMPUR, July 31 (Bernama) -- Bursa Malaysia ended higher on Friday as investors continued to accumulate blue-chip stocks in line with stronger performances across most regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.50 points to 1,724.90 from yesterday’s close of 1,720.40. The benchmark index opened 0.83 of a point higher at 1,721.23, and moved between 1,715.67 and 1,730.12 throughout the day. The broader market was positive with gainers outpacing losers 707 to 402, while 547 counters were unchanged, 1,085 untraded and 56 suspended. Turnover expanded to 3.03 billion units valued at RM3.56 billion from 2.49 billion units valued at RM2.25 billion on Thursday.
Bank Reverses Expansion Plans in China’s Digital Wealth Market
- HSBC is cutting nearly half of its workforce at Pinnacle, its China digital wealth business, with around 900 job reductions, sources told Reuters.
- Pinnacle, launched in 2020, was meant to drive HSBC’s digital insurance and fund sales in China.
- The cost-saving move highlights the challenges HSBC faces in growing its China business amid a broader restructuring push.
Cost Review & Workforce Reduction
- HSBC reviewed Pinnacle’s staff compensation and supplier expenses last year, finding a sharp increase in costs outpacing revenue.
- More than 500 insurance agents have already left since June 2024 as the bank scaled back operations.
- The layoffs will affect 100 staff at Pinnacle’s fintech unit, while another 300 will be reassigned within HSBC China.
HSBC’s China Strategy & Restructuring
- HSBC has long positioned China as a key growth market, committing $6 billion in Asia investments in 2021.
- However, China remains the only market where HSBC’s wealth and personal banking unit is unprofitable, reporting a $46 million loss in 1H2024, down from $90 million a year earlier.
- HSBC initially planned to hire 3,000 wealth managers in China by 2025, but the Pinnacle pullback reflects the broader struggle of foreign financial firms in China.
Foreign Banks Face Headwinds in China
- HSBC’s setback follows Vanguard’s 2023 exit from its joint venture with Ant Group, after struggling to gain traction in China’s digital wealth space.
- HSBC remains committed to its China wealth strategy, with a focus on private banking, insurance, and asset management, a bank spokesperson said.
- The bank is undergoing a wider restructuring under new CEO Georges Elhedery, aimed at reducing long-term costs and boosting profitability.
Outlook: A Shift in HSBC’s China Focus
- HSBC’s move marks a shift from digital wealth expansion to core banking and private wealth services in China.
- With the broader slowdown in China’s financial sector, HSBC may prioritize higher-margin businesses rather than large-scale digital expansion.
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