THE planned closure of Hong Kong and Shanghai Banking Corp. Ltd. by the end of the year will affect about 4,500 depositors, who are mostly garment workers, a top bank executive told Variety yesterday.
Some 20 Saipan employees will also be laid-off but will be offered a “very good severance package,” according to Guy N de B Priestley, chief executive officer of HSBC’s Guam and Saipan branches.
Priestley said the announcement about the closure was made to prepare their customers—3,500 garment workers, 1,000 other individuals and about 40 corporate accounts.
HSBC, however, is concerned about the garment workers due to the “language barrier.”
“Most people don’t really need much assistance. They just close their account. There’s a lot of people that keep account in another bank so they just take their money to the other bank,” Priestley said.
“But the garment workers are more of a challenge because they speak Chinese. So it will take a little bit longer because of the language issue and many of them don’t have a second account,” he added.
But Priestley said HSBC will assist the Chinese workers in transferring their accounts.
A combination of factors prompted the HSBC board to close the Saipan branch, according to Priestley.
The board doesn’t consider the bank’s branches in the Marianas “a good strategic fit,” he said. The islands are geographically closer to Asia but the U.S. policy on trade and commerce applies to Guam and the CNMI.
On Guam, moreover, HSBC is not allowed to have another branch, have ATMs, accept deposits, among other things, but is still required to pay the government a huge amount of tax, Priestley said.
He said these restrictions have “somewhat affected” their operations.
“We briefly considered closing Guam just to maintain Saipan. Unfortunately, it’s not a big enough market at this point to stand by itself. We’ve done very well here and we’ve been very much supported—I’m very deeply grateful for that,” Priestley said.
“They have been looking a little more closely at Guam and Saipan for about a year and a half. There has been a very passionate debate on what we’re going to do with Guam and Saipan. Finally, it was decided that we should close Saipan,” he added.
HSBC’s branches in Fiji, Vanuatu and the Cook Islands were also closed for the same reasons.
“It is really frightening to lose a job during an economic crisis but HSBC will make sure that the affected employees will get adequate benefits,” Priestley said.
Some HSBC Saipan employees will leave the company this month while a handful will stay until December, he said.
Those who will leave are entitled to receive a severance benefit commensurate to their length of service. They will also be given counseling seminars to make them more competitive in the job market. Should they find a job within the HSBC group elsewhere, the company will provide for their air tickets. Those who will be asked to stay until the end of this year will receive a bonus, Priestley said.
