HSBC says it's not quitting New Zealand, says Financial Times story claiming it may was 'a case of mis-reporting'

HSBC is complaining to the Financial Times (FT) over a story from the venerable newspaper suggested the global banking giant would sell or shut its operations in several Asia-Pacific countries, including New Zealand.

Via a Hong Kong based reporter the FT reported, on Tuesday night New Zealand time, that HSBC was set to consider the sale or closure of seven Asian retail businesses from Pakistan to New Zealand, where it has decided to no longer focus investment. The story came just days after HSBC sold general insurance operations in Hong Kong, Singapore, Argentina and Mexico to France's AXA and Australia's QBE.

In response to the FT story, an HSBC New Zealand spokeswoman told interest.co.nz the group wasn't exiting any markets in Asia.

"This includes New Zealand as part of the Asia-Pacific region," the spokeswoman said.

"The strategy in the Asia-Pacific region is to have strong, balanced and diversified geographies and business. The six priority markets (Australia, China, India, Indonesia, Malaysia and Singapore) and two strategic markets (Taiwan and Vietnam) are where investment is prioritised, but this doesn't exclude other markets."

HSBC New Zealand is technically the New Zealand operations of the Hong Kong-based Hongkong and Shanghai Banking Corporation Limited. In the nine months to September 30, 2011 HSBC NZ made profit after tax of NZ$43 million. As of September 30 it had total assets of NZ$4.93 billion and total liabilities of NZ$4.91 billion.

Active in mortgage market

Last weekend the bank cut its one-year fixed home loan rate by 36 basis points to 5.29% per annum to what it termed the lowest rate offered by a New Zealand bank in at least a decade. HSBC also cut its two, three, four and five-year fixed-term mortgage rates with its two and three year rates of 5.77% and 6.07% also the lowest advertised by a major bank. The rates are, however, only available to HSBC's premier customers who must have either a minimum combined home loan of NZ$500,000 or NZ$100,000 in savings and investments. See all advertised bank home loan rates here.

Last year HSBC NZ raised NZ$200 million through an issue of five-year floating rate notes to institutional investors. And in 2007 it sold about NZ$700 million worth of mortgages to Kiwibank that it had bought from AMP just four years earlier.

Meanwhile, the HSBC spokeswoman said the group continued to invest and grow in Asia as evidenced by its strong 2011 financial performance. Furthermore she said the bank was taking the FT story up with both the journalist who wrote it and at FT  headquarters in London "as a case of mis-reporting." The original article featured quotes from Peter Wong, chief executive of HSBC in Asia.

The group's 2011 annual results, released on February 27, highlighted a 15% rise in profit before tax to US$21.9 billion, with a strong performance in faster-growing markets with revenue up 12% in Asia, Latin America and the Middle East and North Africa, which now account for 49% of group revenue. HSBC also said it had "gained traction" in the first year of a three year strategy to reshape the group, improve returns and position for growth with the disposal/closure of 16 businesses in 2011, and 3 so far in 2012.

In its results presentation HSBC said its return on equity rose to 10.9% in 2011 from 9.5% in 2010, while its cost efficiency ratio deteriorated to 57.5% from 55.2%. The percentage of the group's revenue made in Hong Kong rose to 5.8% from 5.6% with revenue from the rest of the Asia-Pacific rising to 7.45% from 5.9%.