A local SME at a local conference we spoke to indicated that they were already shifting away from HSBC for their banking activities and would be dealing with a local bank that 'actually understood their needs rather than just claiming to'. Other SMEs at the same conference indicated that they would be reviewing their banking relationships with the bank.
Already struggling to gain marketshare in China from both other foreign entrants and local banks, it appears that HSBC management is increasingly out of sync with local requirements as nearly all other local banks are doubling down on SMEs recognising that they will likely be a key source of revenue as interest rate regulation increases domestic competition further. Although increasing costs are hurting all international banks, applying global policies or cost-cutting in local markets can have disastrous effects especially in a market as important as China.
We received no reply from HSBC when we requested comment.