HSBC crosses 1 billion RMB milestone in Singapore

Over 1.25 bllion (S$250 million) in renminbi deposits has been raised since the Bank launched its suite of RMB savings and time deposit accounts in January 2011.

According to HSBC, Mr Greg Zeeman, Head of Personal Financial Services at HSBC Singapore, said “The response has been very good. Many of our customers have been watching the developments in the RMB closely and they are delighted to now have access to the currency. We anticipated pent-up demand for the RMB from customers but still, the response has exceeded our expectations.”

HSBC Global Research estimates that more than half of China’s trade flows with emerging market countries, which account for the bulk of China’s trade, could be settled in RMB within 3-5 years from less than 3% currently. That would mean that nearly USD2trillion worth of trade flows could be settled in RMB annually. By 2015, HSBC Global Research expects more than half of China's total trade flows to be settled in RMB, making it one of the top three global trading currencies.

This is driving up demand for access to the RMB and HSBC has responded very swiftly to this, by offering RMB deposit accounts in Singapore. HSBC is currently offering one of the highest interest rates for RMB deposits. Promotional interest rates for RMB time deposits go up to 1.78%p.a. and Promotional interest rates for RMB savings deposits go up to 1.38%p.a. These promotional interest rates are on offer until 28 February 2011.

The strong RMB deposit momentum that HSBC is seeing in Singapore mirrors the growth of the Bank’s RMB portfolio in Hong Kong. As at end last year, HSBC’s year on year growth in RMB deposits in Hong Kong was 94%, 3 times more than the Bank’s overall deposits growth rate.

Sharing more details on HSBC’s RMB deposits in Singapore, Mr Zeeman said “Most of the RMB deposits are time deposits with the average deposit size around S$200,000 equivalent. Interest has come from customers across the board, with the majority coming from HSBC Premier, our global priority banking service.”

Initial customer feedback shows that they see the access to the RMB we are giving them as a first step towards building up their RMB-denominated investments. We see good growth potential in the outlook for RMB - denominated investments, given that demand and access to the currency is rising rapidly.”

Already, HSBC Global Asset Management, the Bank’s asset management arm, has launched a RMB Bond Fund for accredited investors in Singapore and Hong Kong. The Fund has collectively raised US$400 million in Hong Kong and Singapore. HSBC is building on the success of its RMB campaign and furthering the Bank’s first-mover advantage by lining up more RMB-denominated products in the coming months.

Elaborating on customer interest for RMB investments, Mr Zeeman added, “Right now, most of the demand for RMB is from sophisticated investors who have been following the RMB for some time and we have already put some RMB denominated products at their disposal. However, the launch of our RMB accounts has also generated much interest from customers who did not previously place their funds in foreign currencies. As the RMB gains prominence, we expect to see this broader interest from customers grow and we are lining up more RMB-denominated products to cater to their needs in the coming months.”