Niccolo Polli (HSBC Luxembourg): four avenues of growth
HSBC Luxembourg CEO Niccolo Polli says all four of the bank’s business lines in the Grand Duchy – securities services, wholesale banking, private banking and asset management – are positioned for growth in 2020, with the country’s position as a gateway to Europe especially for Chinese business, playing a crucial role.
How is HSBC evolving globally and in Luxembourg?
HSBC is a global bank but Asia provides a key competitive advantage to our Group and our extensive presence in Europe means we have a unique capacity to give our customers the support they need as they look east to the burgeoning markets in Asia-Pacific, particularly to China. Luxembourg has a very important role to play there, being an important access point to continental Europe for Chinese banks and companies. There are already 6,500 Chinese people in the Grand Duchy, over 1% of the population, with a strong concentration in Luxembourg City. Most recently, we have supported the initiation of the Sino European Exchange Network www.seen.luto encourage a strategic neutral platform to guide China businesses through the web of requirements needed to do business in the European jurisdiction, and to accelerate professional development of China-interest professionals in Europe, and vice-versa.”
The relationship between the EU and ASEAN countries such as Singapore, Indonesia and Malaysia also continues to grow stronger and our established presence in all of these markets mean we are in a strong position to support customers between these two different trading environments.
All of this naturally creates growth opportunities in our four business divisions, starting with securities services, where the absorption of a business over USD 150 billion in assets from a large international asset manager has moved us from the top 20 to the top 10 transfer agency providers. We are now implementing a strategy to get to a top five position with a major focus on private assets such as real estate and debt. We are establishing a complete transfer agency platform on which clients need to be on boarded only once to gain access to the full range of services. We provide people with banking services here but help them all over Europe. Secondly, our wholesale global banking business is becoming more sophisticated. Whilst we have been providing full-fledged cash management activities for long time, we have over the past few years developed a broader offering which now includes foreign exchange products, money market deposits, credit & lending. We can also help clients access more products like capital call facilities through the HSBC network – the Luxembourg team coordinates such activities but our broader network will offer the products. We have plans to roll out next-generation virtual account management. We look at differentiating ourselves and becoming more innovative aligning ourselves with our clients’ needs and expectations. We have positioned our private bank to be the European Economic Area booking hub for the Group, with Relationship Managers, Investment & Credit Advisory and Discretionary Portfolio Management teams based here in Luxembourg. Here again we look at being innovative and will be rolling out the Aladdin platform developed with Blackrock to evaluate optimised risk allocations for our clients’ investments. Our fourth business line is asset management, operating from our UCITS and AIFM approved Management Company which manages HSBC’s Luxembourg and Irish domiciled funds with circa €100 billion under management. All our four business lines at HSBC Luxembourg have strong growth plans for 2020 and beyond!
"We provide people with banking services here but help them all over Europe."
What are your priorities as CEO?
Against this background of ongoing growth, my main priority is our people. We are very active in diversity and inclusion. We have an ExCo sponsored diversity and inclusion forum with two official employee resource groups - ‘Balance’ to promote awareness on gender diversity, and ‘Ability’ which is dedicated to leveraging the skills and abilities of colleagues with disabilities. A third, Pride (for LGBT+ issues) will be launched in early 2020. Inclusion is a key focus for the Group and for us locally – and it is well proven that a diverse and inclusive culture is more successful. Identifying and developing talent is crucial for us; we do this through training but also through encouraging international experiences within our broader network, as per the opportunities arising. For example, the Chief Operating Officer for Ireland is currently working with us. This is a great opportunity both for him and for us. This collaboration allows to better align the local business to the Group structure, and as a result we can deliver a more seamless HSBC experience to our customers. Having had talent management responsibilities at a European level as Head of Strategy for Europe, this priority remains very high on my list.
Which opportunities and risks do you see ahead?
China is a huge opportunity – many clients view us as an Asian bank also active in Europe. The more Luxembourg becomes known as a Chinese gateway, the better for us. Brexit is another opportunity for the Grand Duchy with a number of banks setting up headquarters or moving operations here, while funds and management companies have also moved to the jurisdiction. Another big opportunity is sustainable finance. Finance has a crucial role to play in tackling climate change – and HSBC is recognised as a leading partner in the transition to a low-carbon world. We are committed to supporting responsible economic growth and enabling the low-carbon transition using sustainable finance. There is no doubt that progress is being made on green and sustainable investment. We expect to see USD180–240 billion of green bond issuance in the market by the end of 2019, significantly more than forecast at the beginning of the year. We do need far more cooperation between financial institutions and participants in these various industries to unlock systematic investment, and a more coherent policy framework from governments to guide the transition. Going forward, urgency should be our climate change watchword. Urgency to tackle emissions, to boost investment into green projects and to preserve our fragile ecosystems. As for risks, everyone knows about the global ones – continued negative interest rates, increased political tensions, Brexit – but none is specific to HSBC. I remember that when we opened in the US on the East Coast, it was difficult to compete with local players. Then we opened on the West Coast and experienced excellent growth because of the strength of our brand in Asia. The same is happening here, where HSBC’s brand is about connecting investors, institutions and corporates to opportunities in Europe through Luxembourg.