HSBC Bank Malta does not plan more branch closures and is committed to upgrading its entire customer proposition, newly appointed chief executive officer Mark Watkinson told The Sunday Times.
HSBC Malta is no more demanding than the world required it to be
In mid-December HSBC announced it would close six branches by mid-March in a network restructuring exercise designed to improve organisational effectiveness and cut costs sustainably.
“There are none on the cards,” Mr Watkinson replied when asked whether more branches would be closed. “We will now have 25 branches which we feel will provide an optimum level of coverage. We feel we have the right size branch network and we are getting our direct proposition in shape.
“In the next 24 months, I would like to see the branch renovation programme and the replacement of all the old ATMs complete. In the meantime, we will continue to enhance the other alternative customer channels like internet banking, while the face-to-face in-branch experience for wealth management and mortgage customers will also be upgraded.”
In his first interview to the Maltese media since taking over from Alan Richards almost three months ago, Mr Watkinson explained the bank’s strategy to carve a positive relationship with both unions representing HSBC staff.
Neither the right-sizing programming nor the recent sale of the bank’s card acquiring business involved redundancies; both decisions had tested the bank’s relations with the unions.
“We have adopted a strategy to meet people early, work with unions in a partnership environment, and spring no surprises,” Mr Watkinson said. “A tribute to that strategy is the successful implementation of our collective bargaining agreement.”
The chief executive listed communicating with staff and cascading his message to all levels as one of his foremost priorities – 80 per cent of his role, he said, involved communicating with or about staff, customers, and regulators.
He has seen to the continuation of the bank’s ‘Let’s Lead’ programme, which sets out the bank’s aspirations for the following year. Up to 60 per cent of staff voluntarily attends the programme’s sessions, which are held after closing time.
The chief executive has just led the latest quarterly senior managers’ meeting when 120 members of staff discuss group and local performance in an informal setting that also sees some role reversal.
Regular breakfast meetings are also held with ‘two-downs’ that Mr Watkinson has found useful to engage another level of management. In an effort to reach staff in branches, Mr Watkinson intends to embark on a twice-yearly ‘CEO roadshow’ to give teams a 20-minute update on bank performance.
HSBC Bank Malta registered a pre-tax profit of €88.3 million for 2011, up €5.2 million over 2010. He said the bank’s business environment was likely to remain as – or more – challenging this year, and Malta’s open economy was bound to be affected by international factors.
Long-term projections were difficult to make although the move to finally sign off the Greek deal was a very positive step. Much now depended on how Greece implemented its promises to reform. With pressure on Portugal and Spain, the eurozone was in for a tough year.
Positive developments in the US and Asia boded well for Europe, however. Employment numbers in the US were starting to look more encouraging and there were initial signs of stability in the housing market.
“If the US comes back on track and starts to see two to three per cent growth, it is going to help us all. It will help exporters in Europe.
“Meanwhile, China’s inflation is coming back under control and the government is addressing concerns on house prices. This is all good news for Europe.”
Back in Malta, Mr Watkinson said the bank was gearing up to grasp further opportunities as the financial services sector, particularly the funds and insurance industries, continued to grow.
Luxembourg, Malta’s major funds competitor jurisdiction, currently has $2.1 trillion under management. Dublin has $1 trillion.
The players in Malta currently manage about $10 billion but the sector had the potential to grow to $100 billion. At a tenth of the size of Dublin and one-21st of Luxembourg, it would still be small, Mr Watkinson stressed, but in a Malta context it would be a game-changer.
HSBC, he added, would be able to contribute to the growth story in Malta’s funds industry, particularly on the strength and experience of its brand.
Asked how Malta was perceived in the major financial centres in London or New York, Mr Watkinson said the circuit viewed the island as a “nascent” jurisdiction, one that was just starting to win recognition as a third option as far as the EU is concerned.
Mr Watkinson, who has worked in nine different countries across the globe, said he has been impressed with the operation he has been tasked to lead and the quality of the talent within its structures – HSBC’s European executives are keen to find ways to give Maltese bankers opportunities within the group. Asked for his message to business customers who sometimes thought the bank to be particularly demanding, Mr Watkinson said HSBC was no more demanding than the world required it to be.
“It is a very different world nowadays, particularly in relation to money laundering and ‘know your customer’ procedures,” he explained. “There are significant changes taking place around the world. If Malta wants to be a member of the global community, it has to be part of these regulatory changes.”
Over the past two years, Mr Watkinson has been chief executive of HSBC Philippines, before moving to Canada for a year, then relocating to New York for six months, and has now settled in the Valletta office.
Born in England but raised mainly in Hong Kong, then Singapore, Malaysia and Japan, Mr Watkinson is used to island life and said his move to Malta felt like “coming home”, even if, he jokes, it has rained often every day since January.
He and his wife Sarah are keen divers and are looking forward to exploring Malta’s “amazing” cultural heritage.
The couple are excited to carry on Mr and Mrs Richards’ work within the HSBC Foundation team in the education, environment and heritage spheres. A major heritage initiative is to be announced in the next few days, he said.