(AT Express) – Standard Chartered Plc (STAN) and HSBC Holdings Plc (HSBA) were among banks that shuttered some branches in Hong Kong as pro-democracy protesters remained on the streets following weekend clashes with police.
About 44 branches, offices and automated teller machines were closed today, according to the Hong Kong Monetary Authority. The front entrance of the Cheung Kong Center, home to Goldman Sachs Group Inc. and Barclays Plc (BARC) in the city, was barricaded, with demonstrators gathered peacefully on a blocked road about 200 meters (660 feet) away in the late afternoon.
Hong Kong stocks dropped after protest-rallies mushroomed yesterday, leading to violent clashes, and people dressed in black blocked some roads into the business district today. The closures marked the biggest disruption to banks’ operations in the city since at least the 1970s, though a lull through most of the day allowed people to go to work in the financial hub.
“I have not seen anything like this before,” Ma Yue, a finance professor at City University of Hong Kong, said by phone. “While Hong Kong had experienced social disturbances in the ’60s, those are not comparable with today’s situation because Hong Kong was not an international financial centre.”
An office for Barclays in the Cheung Kong Center building was closed, while three Citigroup Inc. (C) outlets in the city were also shut, according to a list released by the HKMA. Some Citic Securities International Co. and Ernst & Young staff were working from home, the firms said.
Financial Hub
Local and foreign banks together have about 1,372 branches in Hong Kong. The financial-services industry employs more than 220,000 people, or approximately 6 percent of the city’s workforce. HSBC had 29,000 employees in Hong Kong as of the end of last year, while Standard Chartered has about 6,000 people.
An HSBC branch in Mong Kok district, which is one of the city’s most densely populated areas, was among those closed after protests unexpectedly spread beyond the main island. The bank also shut outlets in the shopping district of Causeway Bay, where demonstrators had congregated, and Admiralty, home to the government’s main offices and site of the most violent confrontations during the weekend.
Services elsewhere were operating normally, including at its main office in the Central district, the London-based bank said in an e-mailed statement. Europe’s biggest bank has about 162 sites in Hong Kong, according to its website.
Shares of HSBC closed down 1.8 percent at HK$80.70 in Hong Kong, extending their decline this year to 4.1 percent. The city’s benchmark Hang Seng Index slid 1.9 percent, while its currency dropped and equity-market volatility surged. Financial firms such as HSBC comprise more than 40 percent of the Hang Seng, according to data compiled by Bloomberg.
Crucial Days
“Investors are feeling uneasy as the Occupy protests are still going on,” Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong, said by telephone. “Developments in the next one to two days will be crucial because that will let us know whether the protesters will voluntarily disperse.”
A public area underneath the main HSBC building in the Central district was a key site in 2012’s Occupy Central movement, as protesters against global inequality camped there until they were evicted almost a year later. A red construction facade now occupies that space as HSBC prepares to set up a “heritage feature” there to commemorate its 150th anniversary.
Civil Disorder
At Bank of East Asia, Tong Hon-shing, deputy chief executive and chief operating officer, said that its closure of four branches was the most because of civil disorder since at least the mid-1970s when he joined the lender. The stock slipped 2.8 percent today.
Standard Chartered said today that operations were temporarily suspended at five branches: three in Admiralty, one in Causeway Bay and one in Mong Kok. The Hong Kong unit of China’s Bank of Communications Co. also said it had shuttered a branch in Mong Kok. Its shares slid 2.8 percent in Hong Kong.
Others to report closures in protest areas included Hang Seng Bank Ltd. and Australia & New Zealand Banking Group Ltd. DBS Group Holdings Ltd. at 1 p.m. extended closures to three branches in Causeway Bay and Mong Kok, after initially shutting only one outlet in Admiralty, due to “instability” in those areas.
‘Operational Risk’
Financial markets are operating smoothly as banks and the stock exchange maintained normal services, said Raymond Yeung, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. At the same time, the protests have heightened “operational risk” in the city and could intensify over coming days, which include public holidays on Oct. 1 and 2, Yeung said.
Hong Kong’s credit ratings won’t be affected unless the protests are more widespread and last long enough to have a material impact on the economy or finance stability, Andrew Colquhoun, head of Asia-Pacific sovereign coverage at Fitch Ratings, said in an e-mailed statement.
“We don’t currently see this as very likely,” Colquhoun said. Questions over the territory’s ability to resolve the political issues and whether Hong Kong’s reputation as an investment destination will be eroded “will likely be answered over months or years rather than days,” he said.
Hundreds of protesters at the intersection of Argyle Street and Nathan Road in Mong Kok today shouted for universal suffrage and a city-wide strike and urged Chief Executive Leung Chun-ying to step aside. Signs said: “Keep calm, save Hong Kong” and “Protect the students.”
Bloomberg