HSBC, AIA, Prudential shares slide after report of Hong Kong bank account curbs

[HONG KONG] HSBC Holdings and AIA Group shares fell alongside other Asia-exposed financial stocks after a media report said that some banks have suspended opening Hong Kong bank accounts for clients in mainland China that could be used for overseas investments.

Bank of East Asia’s Shanghai branch has suspended opening such accounts, the South China Morning Post reported on Wednesday (Jun 3). HSBC has warned that all funds deposited into investment accounts must comply with Hong Kong’s regulatory requirements, according to the report.

As well as lenders offering cross-border bank accounts, the clampdown is expected to hit insurance companies like AIA and Prudential, which rely heavily on mainland Chinese visitors to Hong Kong to buy their insurance products.

HSBC was down more than 5 per cent as of 11.30 am in London on Thursday, while shares of AIA insurance company fell 6.8 per cent in its worst day since March. Standard Chartered fell as much as 7 per cent and Prudential fell more than 8 per cent.

Hong Kong banks are ramping up scrutiny of mainland Chinese clients opening savings and investment accounts, part of a broader push to stem capital flight after Beijing launched an unprecedented crackdown on illegal cross-border trading.

Last month, the China Securities Regulatory Commission slapped more than US$330 million in combined fines on three online brokers for operating on the mainland without a licence. BLOOMBERG