HSBC's Future Is in Middle East, Asia: CIB Chief Roberts

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00:00I think we're very proud about the speed, about the scope of what we've been able to achieve

00:03in really a very short time. It's been less than a year, and I think no one would argue that we

00:09probably have done more transformation, more change at HSBC, potentially in its history.

00:13And so we're very, very proud of what we've achieved. I would love to say the easy things

00:18have always been done. There's always tougher things to do, in particular in an ever-changing

00:22environment. But we have done it quite a lot, in particular around the organizational aspects of

00:27the change. So what does year two bring? Year two, I think, in particular for my business,

00:32brings much more focus on simplification, much more focus on really just efficiencies. And that by

00:37meaning not just cost efficiencies, but just being a better bank, being able to respond quicker, to be

00:42more agile. All the things that really takes a long time. Do you think some of that's already in the

00:47price, in terms of the share price performance thus far? I don't know. I mean, I think a lot of it is

00:51certainly in there. I think you mentioned the cost. You know, as George has said many times, we will

00:55achieve the cost savings that we have set out to achieve. We're very confident as a manager team

01:00will do that. And so that's fully in train right now. But clearly, you know, we have to respond to

01:06the environment, clearly to respond to all of the policy changes that are coming out from various

01:10places. So, yes, I think we have done a lot. I think we will do more to do. I think it will be

01:18focused on really making the bank just a better bank, operating more efficiently. I think probably the

01:23stock market understands it. In fact, it's a 22-year high is what it is. So it's an extraordinary,

01:28I think, positive response from the market. But we clearly will always have more to do.

01:33HSBC has exited a series of businesses lately to focus in on that kind of restructuring that you've

01:39just outlined and the cost efficiencies. As the youth would say, there might be a little bit of

01:43FOMO there. Do you think you're missing out on this big moment for Europe, this big moment for the

01:49U.K., as people look to diversify away from the states? No, and I think you're referring to what the

01:55investment bank changes there, because we have actually had a lot more disposals of various types.

02:01Not really, no. And I think the reason being is that we were never a bulge bracket investment bank.

02:06And that is something to everybody understand. We were a good investment bank, in particular, where we have

02:10scale and relevance, Asia and the Middle East being those regions. And if you look at how we

02:16really perform and what our value added, it is really the cross-border nature of our business.

02:22And it is really in regions which we have an undeniable leadership position, Asia and the Middle

02:26East being those two regions. And thirdly, those are the regions for the future. Those are the

02:31regions that will grow. Think about 10 years from now, it's not going to be the same. And I grew up

02:36investment banking. I understand exactly what everybody's talking about. 60% of the fees are in the

02:40United States. And we are in the United States in our debt business, by the way. We've just reduced our

02:45M&A and equity business there. So we can still utilize the value of the capital markets, which

02:51are the largest capital markets in the world. Obviously, very important to be there. So we

02:55have a lot of deals that go to the U.S. capital markets. That's great. But the future is really

03:00Asia and the Middle East.

03:02So critics of that argument would suggest that the experience of five years ago during COVID, when

03:07Asian markets were largely closed, and a lot of the investors that were very bullish on Asia

03:13kind of learned their lesson and really pulled out from that kind of exposure. It's taken a while

03:17to even dip a toe back in. Why, not necessarily in COVID, but in another circumstance, should people

03:24increase their exposure to a region that has historically not always been the most sure bet?

03:30Because I think that's an enormous amount of wealth creation occurring right now in Asia,

03:35whether it be India or China. I think Hong Kong will become even more important capital markets or

03:42center for capital markets around the world. I think that you see a huge amount of capital and

03:47trade flows going between the Middle East and Asia. You have two regions that have an enormous

03:51amount of capital and they're exchanging capital back and forth. But is any of it coming from the

03:55States or from Europe into Asia? Much less. Well, still there will always be. Yeah. I mean,

04:00if you look at where American companies are expanding, they're expanding in those two regions. If you look

04:05at where European companies are expanding, they're not expanding in Europe. I think the U.S. has largely done.

04:09They're expanding in those two regions. The interesting thing, however, is the amount of money going from the

04:15Middle East into Asia and vice versa. I think we have underestimated that is a significant and I think

04:21permanent trend. And that's where we're there is to capture those flows as you have a reordering of the

04:27world's capital flows.

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