Banks “sit on fence” as Hong Kong staff join protests. But for how long?
As banking professionals in Hong Kong have joined the pro-democracy protest movement over the past few weeks, global banks have taken a fairly mild stance towards their participation. While banks certainly haven’t encouraged staff to protest, neither have they threatened dire consequences to those that do.
Banks, however, might have to take a tougher line in weeks to come, if any of their employees are caught acting in a manner that might put their Chinese businesses in jeopardy. The Big Four have already taken a seemingly pro-China stance after anonymous employees of the firms took out an advertisement in Hong Kong’s Apple Daily newspaper on Friday supporting the protest movement. PwC issued a response condemning “all violent and illegal activities”, and supporting the “One Country, Two Systems” regime under which China governs Hong Kong.
So far global banks haven’t had to be so condemnatory, largely because their employees haven’t been associated with protests that have turned violent. Banks are treading a fine line, careful not to annoy staff by denouncing peaceful demonstrations, while also trying not to offend the government in their largest Asian market, China. “They’re maintaining political neutrality,” says the head of HR at a major financial institution in Hong Kong.
While all foreign banks have issued employee advice on the protests, their advice has focused on non-protesting staff about safety when travelling around the city. The strongest warnings have been to “avoid public gatherings”, but these stop well short of threatening disciplinary action against protestors on their payroll. “So far they’ve only told employees to stay vigilant. They’ve not banned them from participating in peaceful protests,” says Vince Natteri, a director at headhunters Pinpoint Asia in Hong Kong.
“Banks are staying silent about employees peacefully protesting, which is effectively sitting on the fence,” says a senior banker at a European bank. “Management isn’t saying ‘please do go or please don’t go’. Banks want to be non-committal, especially those with a large Chinese franchise,” he adds.
There’s a growing concern in the banking sector, however, that some banks may change their ‘neutral’ position, if the protests continue over the next few weeks and months. All it might take is for one employee to hit the media spotlight because of a protest-related incident. This has already happened at Cathay Pacific, which has barred aircrew who have supported illegal protests from operating flights to mainland China, following the sacking of employees for leaking information and the flight-suspension of a pilot charged with rioting.
Like Cathay and the Big Four, global banks in Hong Kong rely heavily on business from mainland clients. There’s no reason to suspect that Beijing will back away from exerting extra pressure on banks whose staff who are, for example, (rightly or wrongly) arrested for ‘rioting’.
It’s particularly risky to support the protests in your work capacity, as was the case with the Cathay staff. “Employers find it difficult to monitor and control what people do in their personal time and personal capacity, but it’s very different if you use your official capacity to make a point,” says the HR head.
Beijing has plenty of leverage over global banks right now, because many of them are competing with each other to grow onshore as China liberalises its heavily-regulated financial system. More banks are expected to apply for control over their mainland joint ventures, following in the footsteps of UBS, JP Morgan and Nomura, which have recently been granted majority stakes. In a sign of its deteriorating relations with Beijing, HSBC, which has pinned much of its future growth on its China business, was excluded earlier this month from a list of lenders participating in pricing for a new loan prime rate.
“There’s already an oversupply of banks in China, so Beijing is in the box seat. You can just imagine what China could do to a bank that’s seen as overtly supporting the protest movement,” says the senior banker. “Management at banks don’t want to be at the helm when the People’s Bank of China says, ‘screw you, there goes your China licence’. It would be career suicide,” he adds.
China is already making veiled threats to employers in Hong Kong. The Global Times, a newspaper controlled by the Chinese Communist Party, has urged the firms to “fire employees found to have the wrong stance on the Hong Kong situation”.
Whether banks would go as far as firing people is hard to say. They’re also very unlikely to conduct witch-hunts to uncover everyone with the so-called ‘wrong stance’, as the total could run into the tens of thousands for the larger banks.
“But if, for example, you call in sick to attend a protest but you get arrested, this could potentially be seen as gross misconduct – enough for a bank to let you go, especially if it’s under pressure from China,” says a Hong Kong headhunter. “If you protest, whatever you do, don’t bring your bank into obvious disrepute. No global bank wants to fall foul of Beijing – China is the only reason they’re in Hong Kong in the first place,” he adds.
Photo by Han Min T on Unsplash
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