Jeroen Bakhuizen, Global Co-Head, International Subsidiary Banking, Managing Director, HSBC discusses the challenges multinationals face today as a result of the global pandemic and its economic implications to the consequences of Brexit. Find out how HSBC can help you today.
Corporate banking services to multinational companies is something that goes right to the heart of who we are at HSBC. That’s why it’s not surprising that HSBC was the most valuable banking brand in Europe as of February 20201. We are not only top of the European banks list in brand value, but also in total assets and market capitalisation. Our brand value shows our strength as a partner for businesses and it’s also a product of our longstanding years of service to our clients, building relationships across 20 countries in the region.
Multinational companies need a corporate banking partner who can help them enhance their business by streamlining cash management, optimising working capital, assessing optimal funding requirements, managing risks and, above all, being a valued and trusted advisor. This role is all the more important when geopolitical uncertainty, Brexit and Covid-19 are acting as destabilising forces and giving businesses more things to worry about.
Seeing the opportunities in Brexit
The challenges of Brexit also present huge opportunities, as corporates rethink their approach in the region. In 2019, the EU commanded the world’s second largest share of export and import goods, equivalent to 15.4% of the global total2. Recent trade deals with Vietnam in 2015, Canada in 2016, and Japan in 2019, signal a willingness to support free and fair, rules-based trade in the region. The question now for corporates is how to be best positioned to take advantage of these opportunities.
HSBC will continue to support businesses as they manage and grow their operations — but with Brexit the key will be to make our offerings available to them wherever they operate. Our large presence and our people on the ground in vital areas across the region means we are able to support businesses whether they are operating out of the EU or the UK, and whether they are importers or exporters.
We are able to maximise our offering on the back of existing strong and established trade flows such as between the US and Europe, ASEAN and Europe, India and Europe or vice versa.
Our presence for both companies that trade into Europe, and those that trade out, will remain central to our efforts and we are strongly committed to it. Within Europe, we have a physical presence in 20 markets to support businesses at home as well as across the region. We actively help make connections between customers, meet potential business partners and assist them in setting up in new countries.
The reality of Brexit is that some trade flows will change and evolve, but we see our role as a facilitator, continuing to support companies to do business both in and out of Europe. And the UK as a large trading partner should absolutely not be discounted either. Britain’s total trade grew 4.8% to £1,407.3bn in 2019, according to the ONS, and just under half of the country’s trade annually is with the EU3.
When it comes to adapting for Brexit, the wheels have already been in motion for quite some time. Firms and banks alike have had to reflect upon where their various propositions sit and, for some, the response has been to move operations into the EU from the UK. Companies also need to consider whether, going forward, they will need a distinct treasury base for the UK if they are active both there, and in the EU as well.
HSBC has been in most of the countries throughout Europe for many decades, and in several for over a century. Our decision has been to have two hubs, one in the UK and one in France. This is a shift in line with what clients need and, importantly, we have balance sheets and all product propositions in both centres.
We are also able to tweak our proposition here and there to meet local demand and reinvest where needed to match the evolving needs of our customers.
Leveraging the power of tech
Providing a strong technology platform to support business functionality is another pillar of our offering. Our platform, HSBCnet, is a global offering and is well supported by the bank. Plugging into this service also offers the opportunity to access our global product and service suite – a wide range of solutions that add value for our clients.
One of the biggest strengths of the HSBCnet platform is the transparency it provides users into their business position. Time and time again we have seen that, through moments of instability or transition, this is something that customers value highly. For example, by providing visibility on cash positions, businesses can make informed decisions about their options and their best next steps.
The value of our network, local presence and people
It is more important than ever to be on hand to support our business clients and we do this well by having a strong local footprint that is backed up by our global presence. Our services harness the experience of years of banking in Europe, understanding regulations and ways of doing business, as well as the insight of a regional and global team of experts.
Our bank is not a single building. It’s a valued service that is created by the strength of our team. The relationship and partnership between companies and our experts is key to building trust and engagement and it’s how we build our local knowledge and expertise. These insights across markets and industries then feed back into enhancing and fine tuning our service provisions.
Multinationals face multiple challenges today, from the global pandemic and its economic implications to the consequences of Brexit. And there will be more challenges in the future, those like the impact of climate change, which we can begin to predict, and others, which we cannot yet guess at. Throughout, companies need a strong banking partner, with the expertise and capabilities that come from being a long-established banking institute with a global presence.
Whatever the challenge, HSBC would very much like to be your partner, with the right service in the right place to support your multinational business, today and tomorrow.