<p>HSBC Holdings (005) completed the privatization of Hang Seng Bank last month, involving a restructuring cost of USD 600 million (approximately HKD 4.68 billion). CEO Georges Elhedery emphasized that there will be no layoffs, and the restructuring costs will also be used for internal employee training. The group has also raised its guidance, expecting the return on tangible equity (RoTE) to reach 17%. CFO Pam Kaur believes the target is &#34;very realistic&#34; and indicated that the overall commercial real estate (CRE) risk is controllable, with a positive long-term outlook for the development of the commercial real estate market in Hong Kong.</p>
<p>HSBC recently disclosed that the restructuring cost related to privatization is USD 600 million, slightly higher than market expectations. Elhedery stated that the group views Hong Kong as a core investment base for talent and technology, and that investment in talent is key to long-term development. He reiterated that the privatization does not involve any layoff plans, and the group will ensure that affected employees have opportunities for career development through training and skill enhancement, such as applying for internal new positions and transitioning to growth areas of the group. The related employee training expenses have already been included in the USD 600 million restructuring cost. Elhedery also mentioned that fixed salaries have been raised by 3.2% this year, with specific increases varying by market and individual positions, while overall, employees with lower salaries received higher increases.</p>
<h2>Elhedery: All Employees Need to Engage with and Use AI</h2>
<p>In the process of streamlining operations, Elhedery emphasized that all employees should engage with and use artificial intelligence (AI). He revealed that HSBC has provided relevant training for employees, covering areas such as document preparation and verification, and in the future, AI will be used to further optimize business processes while providing more customized consulting services to clients.</p>
<h2>Kaur: RoTE Raised to 17% is Fully Achievable</h2>
<p>In the latest operational guidance, HSBC has raised several targets. Kaur believes that raising the return on tangible equity (RoTE) to at least 17% in the three-year target is &#34;fully achievable,&#34; as the increase in customer deposits and trade links brought by new supply chains create opportunities for development, while potential downside risks have been fully considered.</p>
<p>Regarding maintaining the guidance for this year's expected credit loss (ECL) ratio at around 0.4%, Kaur stated that the retail and office markets still face certain difficulties. Although recent active IPO activities and a warming capital market have driven some demand for office space, the vacancy rate for office buildings in Hong Kong remains high at 17%. The pace of recovery in the retail market will still depend on the performance of the tourism industry and local consumption.</p>
<p>Kaur continued to point out that despite fluctuations in the non-performing loan (NPL) ratio, the core businesses of related enterprises are still operating, with no signs of large-scale defaults, and the overall commercial real estate risk is controllable. Elhedery also added that commercial real estate inevitably faces cyclical fluctuations, but he remains optimistic about the long-term development of the commercial real estate market in Hong Kong.</p>
<h2>Liao Yijian: Restructuring Branches into Wealth Centers</h2>
<p>Liao Yijian, Co-CEO of HSBC Asia and the Middle East, pointed out that the recent branch restructuring is unrelated to commercial real estate issues. The core focus is on restructuring branches and upgrading them into wealth centers to enhance customer experience. Currently, there are 27 wealth management centers distributed in mainland China, Hong Kong, and Singapore, typically occupying three times the area of regular branches
In addition, regarding the Hong Kong government's earlier announcement to issue the first batch of stablecoin issuer licenses within this month, Eric Wu revealed that they are maintaining active communication with the Hong Kong Monetary Authority and hold a positive and open attitude towards the development of the Hong Kong stablecoin market and financial innovation, provided that it is advanced under the regulatory framework. Eddie Wu further added that the group has launched a payment solution based on tokenized deposits in Hong Kong and plans to expand related services to markets such as Singapore and the Middle East.</p>
<p>All employees should be exposed to and use AI. HSBC has provided relevant training for employees, covering areas such as document preparation and verification. HSBC CEO Eric Wu</p>

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<p>HSBC Holdings has completed the privatization of Hang Seng Bank, with restructuring costs amounting to USD 600 million. CEO Noel Quinn stated that there will be no layoffs, and the restructuring costs will be used for employee training. The group has raised its return on tangible equity (RoTE) target to 17%, and CFO Ewen Stevenson believes the target is achievable. Quinn emphasized that investment in talent is key to development, and employees need to engage with AI to optimize business processes. Overall salaries have been increased by 3.2%, with lower-paid employees receiving a higher raise</p>

- HSBC Holdings successfully privatized Hang Seng Bank, incurring a reorganization cost of $600 million.  
- CEO Georges Elhedery emphasized that no layoffs will occur, with reorganization costs allocated for employee training, while the company anticipates a core RoTE of 17%.  
- CFO Pam Kaur noted that the commercial real estate risks are manageable, even as the sector faces challenges, with plans to enhance customer interaction through AI training for employees.

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HANG SENG BANK

WP CSI Banks ETF

Huaan CSI Banks ETF

Fullgoal CSI 800 Banks ETF

HSBC Holdings Plc

HSBC Holdings plc ADRhedged

Hwabao WP CSI Banks ETF

ChinaAMC CSI Banks ETF

HSBC HOLDINGS

China Southern CSI Banks ETF

HSBC

ChinaAMC SSE Financials Sector ETF Initiating Fund

HSBC stated that the costs of the privatization and restructuring of Hang Seng will be used for training. Aiqiao Zhi: There will be no layoffs, and talent investment is key to development