Appointments: Banker carves personal service niche in market

By Graeme Kennedy

Friday 2nd June 2000

NOT ELITIST: Simon Edwards says HSBC aims to be competitive at the higher end of the market

Niche top-end operator Hongkong and Shanghai Banking Corporation (HSBC) is seeking further New Zealand growth by focusing on added value and service to compete with the vast customer bases and distribution networks of the "big five" banks, says chief executive Simon Edwards.

HSBC is, depending on measurement parameters, this country's sixth- or seventh-biggest bank with assets of $4.5 billion and an after-tax profit last year of $23.5 million.

"We are a full-service commercial bank but we are not pretending to be anywhere on the same scale as the big five. We don't have the size to go into the mass market," Mr Edwards said.

"We don't have hundreds of branches, the distribution capability, the economies of scale and critical mass all that brings but we can probably provide all the services the bigger banks can.

"We have corporate and commercial offices in Auckland, Wellington and Christchurch and three personal banking branches in Auckland as well as phone banking and a mobile salesforce which supports the branches and can visit customers in their own homes.

"With our size and scope, we inevitably focus toward the higher end of the market - but we are not elitist. Our aim is to be competitive, try to be innovative and grow the business with additional products we can put together competitively and deliver efficiently."

HSBC came to New Zealand in the late 1980s, following its UK parent group's merchant bank Wardley into the market to provide a range of corporate and commercial financial services and personal banking including deposits, investments with unit trusts and insurances.

The bank focused on the high-end corporate market, particularly companies with international links to other businesses that HSBC dealt with around the world, Mr Edwards said.

"Then, with Asian immigration to New Zealand, we developed an Asian business in personal banking. We targeted Asian people coming here from our own backyard - we are the pre-eminent Hong Kong bank and 4.5 million of the 6.5 million population there have HSBC accounts.

"A lot were our customers so we had a natural linkage with the immigration to New Zealand.

"We then broadened our activities into the European market and the initial foray was mortgage-led - we have a $120,000 lending minimum but that is probably not out of step with Auckland mortgage needs and our business is now 50-50 between Asian and European customers."

The bank, formed in Hong Kong and Shanghai in 1865, retains its headquarters in Hong Kong although its parent, HSBC Holdings, re-located to London after buying the Midland Bank in 1992.

Acquisition of the 10th-biggest US bank, the New York-based Safra Republic Corporation with operations in Europe, Latin America and Africa, in the late 1990s made HSBC a truly worldwide organisation, while the bank last month began a joint venture with Merrill Lynch to create the world's first global online banking and investment service.

The group has more than 5000 offices in 80 countries and assets at the end of last year of $US569 billion. It is listed on the London, Hong Kong and New York stock exchanges.

Mr Edwards joined HSBC 20 years ago, training in London, Hong Kong and Singapore as an international manager - a group of 350 who spend their careers moving from country to country and job to job within the organisation.

He has worked in most banking and investment jobs, including Paris chief operating officer for the Midland Bank, opening a China desk in New York and last year helping integrate Safra into HSBC before his Auckland posting.

"New Zealand is an important market and one where we can do good business by playing to our strengths and offering international services to a trading nation," he said.

"In personal banking, we sit here with our three branches so how do we take the big banks on at their own game? Of necessity, we are more focused on being different and we achieve that by making the client much more than just another customer.

"We know them personally, treat them that way and add more value for them than the competition does - personal service is our big differential and it would be at our peril to forget the customer has a choice of banks."

Simon Edwards
Position: Chief executive, Hongkong and Shanghai Banking Corporation
Age: 44
Marital status: Married, one child
Pastimes: Sailing, golf, music

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