HONG KONG -- Hongkong and Shanghai Banking Corp., which has diversified globally while retaining its Hong Kong headquarters, expects never to move its business completely out of the territory, HSBC Holdings PLC chairman Sir William Purves said this week.
There has been speculation that the impending Chinese takeover of the British colony would mean a shift of corporate power to the homing company base in London.
Hong Kong "is our home, so we're not going to be moving too much out," Mr. Purves told reporters who were gathered for the international banking group's annual meeting. "But if it's possible to do things more economically somewhere else, that is always a possibility."
He added that the bank might consider repurchasing its historic headquarters building in Shanghai, giving it a highly visible presence in that city's emerging financial center, if the price were right.
The real problem in Hong Kong, Mr. Purves said, is with the labor supply, making it increasingly difficult to find and retain staff.
Mr. Purves denied persistent rumors that HSBC, which also owns Midland Bank in London and Marine Midland Banks Inc. in the United States, has run up major losses this year i bond trading. He also said it has no immediate plans to raise capital.
"If we thought that interest rates were going to go up later this year, it might be an opportunity to raise our Tier 2 capital, but there are no plans to do so at the moment," Mr. Purves said. "The group is well capitalized but we keep watching the marketplace, because if you're going to borrow for the medium term you don't want to leave it too long if interest rates are rising."
Tough quarter
Without giving performance details, he conceded that the markets in the first quarter were extremely difficult compared with 1993, an exceptionally good year.
Mr. Purves said HSBC is on target to increase profits by $1.2 billion over four years, as it projected in 1992 would be realized by cutting costs and adding revenue from the Midland Bank acquisition.
