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, and Sustainable Finance playing a crucial role.

How is HSBC evolving 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 dynamic 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.luwith the aim to help guide Chinese businesses through the requirements needed to operate across Europe 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 means we are in a strong position to support customers between these two different trading blocs.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 debt, equity, real estate and infrastructure. We are establishing a consistent transfer agency platform globally 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 a 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 look at differentiating ourselves and becoming more innovative, aligning ourselves with our clients’ needs and expectations, and connecting Asian customers to Europe and European customers to opportunities outside Europe through our global HSBC network.We have positioned our private banking to be the European Economic Area booking hub for the Group, with Relationship Managers, Investment & Credit Advisory and Discretionary Portfolio Management teams based in Luxembourg. Here again we look at being innovative and are rolling out globally the Aladdin platform developed with Blackrock to optimise 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, and supporting those employees who are carers for those with disabilities. A third, Pride (for LGBT+ issues) will be launched in 2020. Inclusion is a key focus for the Group and for us locally. It is 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 opportunities arise. These short-term assignments are not only enriching in and of themselves but create better connectivity to the Group. As a result we can deliver a more seamless HSBC experience to our customers. Having previously had talent management responsibilities at a European level as Head of Strategy for Europe, this remains my main priority.

 

Which opportunities and risks do you see ahead?

 

Sustainable Finance is a huge opportunity. 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 issued USD271.7 billion of Green, Social and Sustainability Bonds in the market in 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. China is another big 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 also an 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. As for risks, everyone knows about the global ones: continued negative interest rates, societal divisions and unrest, and now more recently the direct and indirect impacts from the Covid-19 outbreak, but none is specific to HSBC. HSBC in Luxembourg is well positioned to face these headwinds through our diverse customer base and the strength of our teams. HSBC’s brand is about connecting investors, institutions and corporates to opportunities - nowhere is better than Luxembourg to make that happen so we will continue to invest and compete in Luxembourg to be in the top market players.

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