[Image courtesy of www.hsbc.com.cn]
CBI member HSBC recently announced the signing of its first offshore receivables finance agreement denominated in RMB, which brought two Hong Kong and U.K. companies together in a deal highlighting the Chinese currency's growing role in cross-border trade.
HSBC agreed to provide Milagros China Ltd. with a US$1.5 million factoring facility that enables the Hong Kong-based manufacturer and vendor to invoice, fund, and settle sales to U.K.-based Debenhams Retail.
HSBC Global Research estimates that approximately US$2 trillion, or one-third of China's annual trade, will be settled in RMB by 2015.
Herbert Lam, Director of Milagros China, said, "Switching to an RMB facility is a win-win move for us and for Debenhams. Most of our costs are in RMB, because we manufacture in mainland China, but most of our overseas sales are currently denominated in USD. This creates exchange-rate risk we've had to account for in our prices, so now we’ve removed that risk it puts us in a stronger competitive position that will benefit our customer in turn."
Rakesh Bhatia, HSBC's Global Head of Trade and Receivables Finance, said, "As China's economy expands and the internationalisation of the RMB gathers pace, I believe we'll see many more companies following Milagros' lead. HSBC has built RMB trade capabilities in 59 markets, because the customer demand is already there. With the RMB predicted to become a top three global trade currency within the next five years, we expect that demand to grow exponentially."
Please click here to read the full press release by HSBC.
In additional news, HSBC recently launched a new RMB savings insurance plan, which is an alternative wealth management product designed to help customers diversify their investment portfolio.
HSBC's WealthSave (Renminbi) Insurance Plan provides policyholders with competitive guaranteed premium return of up to 113% and helps them to capture potential RMB appreciation.
Diana Cesar, HSBC's Head of Retail Banking and Wealth Management for Hong Kong, said, "WealthSave (Renminbi) is a competitive savings insurance plan designed for customers who are looking for an all-in-one wealth management solution that combines savings, protection, and potentially higher returns in the medium to long-term compared to pure RMB savings. As the leading life insurance services provider in Hong Kong, HSBC is committed to introducing simple and practical products and services that address customers' needs."
Ms. Cesar added, "The market sentiment for RMB products remains favourable. In view of the growing demand for RMB products among people in Hong Kong, we are launching WealthSave (Renminbi) Insurance Plan to not only provide customers with exposure to potential currency appreciation, but also help them to diversify their portfolios from a total wealth management perspective."
Please click here to read the full press release by HSBC.
HSBC also recently announced that it successfully executed the first RMB-denominated cross-border trade transaction in India for a major pharmaceuticals company. HSBC India has now joined the rapidly growing list of HSBC entities that have concluded their first trade settlement in RMB.
Sandeep Uppal, Managing Director and Head of Commercial Banking, HSBC India, said, "India-China is a very important and active trade corridor, and we see the first RMB settlement as an important milestone in the fast-growing bilateral trade between the two countries. We have a clear focus on emerging markets, and this deal showcases HSBC's capabilities in facilitating international business in the region. We are geared to provide our customers with financial solutions that can help them benefit from the vibrant and growing trade in this corridor."
Surath Sengupta, Head of Global Trade and Receivables Finance, HSBC India, said, "South-South connections are set to revolutionise the global economy in the same way that trade between the developed nations exploded in the 1950s and 1960s, and we expect the 21st century to see significant trade growth between these two emerging nations. The scale of opportunity between India and China is huge, and HSBC is well-positioned to support trade between both the countries."
Please click here to read the full press release by HSBC.
In mid-July, HSBC opened a new office in Guangzhou's central business district in southern China. HSBC Software Development (Guangdong) Ltd. (HSDC) and HSBC Electronic Data Processing (Guangdong) Ltd. (HDPG) will occupy four floors of office tower one and all of office tower two, with capacity for more than 6,400 people. The increase in capacity will enable HSBC's continued business expansion in the region.
HSBC's new office was pre-approved for Leadership in Energy and Environmental Design (LEED) Gold pre-certified ratings from the U.S. Green Building Council (USGBC), an international standard for environmentally-friendly construction.
Sean O’Sullivan, HSBC's Group Chief Operating Officer, said, "Starting with a Group Service Centre (GSC) in 1996, HSBC currently employs around 10,000 staff in HSDC and three GSCs under HDPG in Guangdong, providing seamless services to the Bank's customers across the globe. The launch of the new office is another milestone of the Group's presence in the province."
Helen Wong, HSBC China Chief Executive Officer, said, "This investment demonstrates once again the Group's commitment to the China market. More importantly, it will further enhance our capability to serve customers and join them up to HSBC's global network as the Bank continues to expand its network and grow business in China."
Please click here to read the full press release by HSBC.
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