HSBC to Expand Technology Operations in China, Add 1,000 Jobs
Given the increasing use of technology within the financial markets, HSBC Holdings plc HSBC seeks to further boost its technology operations. Per Reuters, the company plans to add more than 1,000 jobs in China in 2019.
Being the world’s second largest economy, China is a key market for HSBC. The company’s chief information officer, Darryl West stated that as part of the expansion plan, it is expected to increase workforce by almost 14% at its technology development centers in Guangzhou, Shanghai and Xi'an.
HSBC’s group technology operations currently have nearly 40,000 employees worldwide. Over the past few years, the company has spent almost $3 billion per annum on such operations. West informed that they plan to spend nearly $3-$3.5 billion annually on technology in the next few years.
West stated, “There is a lot more we can do with technology in mainland China. The level of technology adoption and innovation in China is way ahead of other markets. We see mainland China as a tremendous source of talent, not just for the local market but our technology operations globally. We are hiring very aggressively here.”
These technology centers have become increasingly useful for banks and hence are being used for their core operations. The centers generally develop, and implement various risk management technologies and digital applications, which make attracting customers easier for banks.
Notably, HSBC’s largest technology capacity in China is at the Guangzhou center. It employs more than 5,000 people. To date, nearly 30% of the work done at this center has been for mainland China. In the next few years, this percentage is expected to increase.
At its technology centers in India, HSBC employs nearly 10,000 people. The company also has centers in Britain, Canada, Hong Kong and the United States.
In addition to its expansion plans in China, the company has been planning to strengthen performance with special focus on building operations in Hong Kong so as to deliver high-single-digit revenue growth annually from the entire Asia region. Moreover, in the U.K., the bank aims at increasing mortgage market share along with growing commercial client base.
Thus, we believe that the company’s efforts to expand in China and the U.K., strong balance sheet position, diversified global presence, and leadership position in several businesses will support its financials in the quarters ahead.
Shares of HSBC have gained 1.7% over the past three months against 5.6% decline of the industry it belongs to.
Currently, HSBC carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks from the finance space are Cohen & Steers, Inc. CNS, BlackRock, Inc. BLK and Franklin Resources, Inc. BEN. All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, Cohen & Steers witnessed an upward earnings estimate revision of 6.9% for 2019. Its share price has risen 40.3% over the past six months.
Over the past 60 days, the Zacks Consensus Estimate for BlackRock’s current-year earnings has been revised 5.7% upward. Its share price has increased 7.5% over the past six months.
Franklin Resources has witnessed an upward earnings estimate revision of 8.9% for fiscal 2019, over the past 60 days. Over the past six months, its share price has improved 3.3%.
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