Hong Kong's Lam praises HSBC, slams UK

[HONG KONG] Hong Kong leader Carrie Lam endorsed a stronger presence for HSBC Holdings while hitting out at the UK for both disparaging the bank and failing to contain the coronavirus as Prime Minister Boris Johnson opens the door for millions of the territory's residents to move.

In an interview Thursday with Bloomberg Television, Mrs Lam said she would "love" to see HSBC expand in Hong Kong, where it has come under increased criticism over freezing the accounts of activists and supporting the financial hub's sweeping national security law. Mrs Lam also said China probably wouldn't take action against lenders that comply with US sanctions, which the law forbids.

"I don't see why the Central People's Government would take that sort of action," Mrs Lam said. The Hong Kong chief executive added that her government "would continue to work with the banking industry in Hong Kong, not only to grow their business in Hong Kong, but also the Greater Bay Area, because that's where Hong Kong's strength lies."

Mrs Lam has sought to convince multinational companies to stay in the territory even as the US, U.K. and other Western nations heap criticism on China for moving to silence democracy advocates following historic protests in 2019. Britain on Sunday will begin accepting visa applications for as many as 2.9 million British National (Overseas) passport-eligible Hong Kong residents as well as their dependents, who together make up almost 70 per cent of the city's population.

Mrs Lam said she didn't see how that many people would want to move to the UK, noting that its National Health Service was under "tremendous pressure" while praising Hong Kong's hospitals. Still, she said she would respect the decisions of anyone who wanted to move and said the government needed to work to improve their lives.

Mrs Lam's comments on HSBC came after she said chief executive officer Noel Quinn was "grilled" for complying with Hong Kong law. On Tuesday, he defended the bank's move to freeze a former Hong Kong lawmaker's when questioned by UK parliamentarians.

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Mr Quinn said the move was purely driven by the need to comply with local laws, and that he wasn't in a position to make a "moral or political judgment" on such matters, he said. He also said he was "trying to stay out of the politics of one country versus another and do the right thing by our customers."

The London-based bank, which counts Hong Kong as its largest market, has been caught in the midst of growing tension as China tightens control over the former British colony. The bank has faced criticism in China for cooperating with the investigation into Huawei Technologies, and drawn rebukes in Washington and London after its top executive in Asia last year publicly endorsed a controversial security law imposed on the city.

China is key to the bank's turnaround plans, which include shifting billions in capital to expand in Asia and cutting back in Europe and the US.

Mrs Lam called Hong Kong's regulatory regime "rule based" in contrast to what she called "politically driven" sanctions from the US. She said she understood why people and companies were considering alternatives to the territory, but said "the money has not moved yet." "Hong Kong will continue to strengthen our competitiveness in order to attract more capital," she said.

BLOOMBERG