HSBC Holdings Chairman visits Malta

HSBC Holdings Chairman, Sir John Bond briefly visited Malta last week. During his stay he met with Prime Minister Eddie Fenech Adami, Finance Minister John Dalli, Central Bank Governor Michael Bonello and MFSC Chairman Joe Bannister. He also spoke frankly on a wide range of issues such as HSBC Malta’s performance, employee relations, HSBC’s Formula 1 sponsorship and its plans for Lombard Bank Malta.

HSBC has been active in Malta for several years initially through Midland Bank and latterly as HSBC following the purchase of a 70 per cent shareholding in Mid-Med Bank. How do you view your performance in Malta?

I think it's going well so far. That's not to say that there are not things that we still have to do. But we are very pleased with our investment and above all we hope that the people of Malta are pleased with HSBC's arrival in Malta.

What has been HSBC's investment so far in Malta and what will HSBC's investment be in the coming two to three years?

We constantly invest throughout HSBC Group every year in our business. The investment that is most visible to you here would undoubtedly be the refurbishment of HSBC branches. The investment that would be less visible to you would be that nearly 300 of our colleagues in Malta have left Malta to go on HSBC courses outside Malta.

So we invest in our human talent, as well as our physical premises where we meet our customers. We have invested in a new computer system which we've been in the process of installing. So, there's been a considerable amount of investment going on, some of it visible, some of it not visible to the public.

Your efforts to decentralise the decision-taking process away from head office to the branches and to quicken this process through the setting up of area managers were welcomed locally. How does this tie up with your statement in May 2000 in the foreword to The HSBC Group - A brief history that HSBC believes in building long-term relationships with customers?

At HSBC, we encourage individuals to take accountability for what they do. Wherever we operate in the world, we try to avoid having committees. We try to instil in all of our colleagues a sense of personal responsibility.

But what's more important than that, is our experience that the closer to the customer that you take the decision, the better it is for the customer. The more you can serve your customer promptly, efficiently and personally, the better. It is important that as many decisions as possible that relate to a customer's business are taken where the customer is: in the branch or wherever.

You have to measure that against the experience level of your colleagues. But we have a lot of talented people in HSBC, who are well capable of taking these decisions, and we encourage them to get on and do it. It works for our customers and it gives our individuals more authority and more of a sense of responsibility. This is part of HSBC's service culture. We must not forget that we are in the service business.

As the acquisition by HSBC of CCF - which has a shareholding in Lombard Bank (Malta) - has been formally completed, what are HSBC's plans for Lombard Bank (Malta)?

I think the chances are that we will try to dispose of the shareholding in Lombard, if we can find a good buyer which will be good for Malta and good for us. At a sensible price, we will probably dispose, I think, and we will concentrate on the very important investment we have in HSBC Malta. We will definitely do it in a way that is orderly, that meets with the regulatory requirements and it will be done professionally. We are not in a hurry. We will take our time for the right buyer at the right price.

HSBC is an international organisation with 6,500 offices and over 170,000 employees in 79 countries. What is HSBC's policy in respect of staff in particular countries gaining further experience by working in other, perhaps larger countries with a more sophisticated financial environment? How does Malta fit into this?

Our businesses is about people. So we need people who are motivated, well trained, who know how to look after our customers, and who want to be part of a successful, ever-growing organisation. It all comes together in the interest of our clients, our shareholders and our staff. Our job is to marry those three interests up in a way that satisfies all three parties.

We pay a tremendous amount of attention to training our people. Some of that training is done within the respective country, some of it is done outside the country, and we encourage also our colleagues to practice self-development. We do a lot of computer-based learning which an employee can do at his or her desk when it suits him or her.

There will be plenty of opportunities for the talented Maltese staff to work outside Malta, if they want to, and if we have a job that suits their requirements and suits our own requirements. You should expect to see people going to work outside Malta at a very steady pace.

At present, we have three Maltese HSBC employees working permanently outside Malta. I think that number will increase but I don't think it's going to get into hundreds, because that will destabilise our business here.

The important thing is to keep our staff motivated, encouraged and challenged. We want our staff to participate in the success of HSBC, so we have share option programmes and save-as-you-earn programmes to help them share in the success that they create.

HSBC is highly supportive of small businesses, particularly in the UK, waiving certain charges for start-ups and committing resources to help small businesses. Will this initiative be followed internationally, including Malta?

Probably HSBC is the world's major small business lender around the world. This is not only in UK, but is also the reality in various continents. Wherever it is, whether in the US, Asia Pacific, in Europe, or anywhere else, we look for medium-sized enterprises, because first of all these are the life-blood of an economy. This is where most of the serious employment creation is taking place round the world.

Secondly, there are many big financial service organisations that like to focus on the very top clients, but are not so interested in the medium-sized businesses. HSBC is interested in both. We have major clients, but we attach tremendous importance to medium-sized enterprises. We particularly do their foreign exchange, their trade, helping with their pension funds, and their payroll. It isn't always about lending money. It's about a whole range of services. It's about establishing a relationship.

We are very interested in the small business sector here in Malta. It's a very important sector for us. It's very important for the economy of Malta.

Therefore, if it is important for the economy of Malta, it must be important to HSBC.

The more we get to know the local environment, the more you will see new products coming out that will be tailor-made for the small businessman. But it will all take place in a measured way as we progress ahead. We need to make sure that it suits the marketplace, that it suits our clients, and that our staff are trained to sell. The days when marketing meant opening your branch doors at 8.00 in the morning and closing them at 4.00 in the afternoon have gone a long time ago in HSBC.

If we don't go out and tell the customers we are interested in them, how can they know? Of course we have to go out. And we should.

How do you see HSBC in 2010?

That's an interesting question. You are asking me at a time when I don't think that the pace of change in the financial services industry has ever been quicker. The technology is changing. The regulatory environment is changing. The economies are changing. There is a far higher telecommunications, media and technology (TMT) sector in every economy than there was before. So it is a period that we might describe as a 'quiet revolution' in financial services.

My goal is for HSBC to be the leading financial services company in the world. I believe that we won't do that by size; I don't think this is something that's measured by size. It's measured by quality: quality of service, and quality of performance. By that I mean quality and performance for HSBC's clients, for HSBC's shareholders and for HSBC's staff.

The only way we will do this is by being an organisation where people want to go and work because it is an exciting place, and where they are well incentivised to work. If you look at HSBC, in nearly every area where there is considerable economic progress being made in the world, we are there on the ground participating in the economy, and serving our customers.

I don't think any other organisation has a better geographic spread of businesses. I think, we have an enormously talented staff. We are blessed with great client lists. So I believe that there's every possibility that HSBC will be among the top financial services organisations in the world in ten years' time. But we have to keep on communicating to our staff that the pace of change is going faster.

We were talking with my colleagues here in Malta earlier on. Our view is that probably, in five years' time, 50 per cent of client interaction with HSBC will be done electronically, without human beings involved. This can be done via telephone, Internet, or via TV. In other countries, we do television banking as well and people access their account by TV. I think the majority of transactions will be client-driven. Clients can do them when they want to, where they want to, and how they want to.

What are HSBC's guidelines for sponsorship?

Here, we need to make sure that we're referring to the same things. Sponsorship, in our terms, means paying money in order to get commercial gain. This is sponsorship (like on F1 cars). We do that in order to gain commercial benefit.

This is different from giving donations. Donations are giving money to the community without any strings attached. We give donations because we want to share our success in all of the communities from where we derive profit.

We have a world-wide policy based on two objectives: of helping to look after children in primary and secondary schools who come from disadvantaged backgrounds; and of looking after the environment. Our policy is very clear. Seventy-five per cent of all the money that we donate around the world will go to these two causes.

This is not something that HSBC has started doing this year or last year.

We have done this for over a century. We have a deeply rooted belief that if we are successful, we should share our success with the communities from where we derive our success.

We tend not to measure it in purely monetary terms because that would not do justice to the tremendous amount of work put in by our colleagues around the world on a voluntary basis. I would think, if you look around the world, I would be very surprised if less than 20 per cent of our staff are, one way or another, doing something in the community, because they want to, and they are doing this while representing themselves and HSBC. We have estimated that that number can be translated into a value of about $24.5 million dollars for the year 2000 world-wide.

To give you an idea we are sponsoring probably in excess of 130 educational projects around the world. All for needy children.