HSBC boosts RMB trade settlement service to 59 markets

In the first five months of 2012, HSBC has broadened its global renminbi (RMB) network coverage to 59 markets with RMB Trade Settlement capabilities.

The recent launch of RMB Trade Settlement services in Jordan further consolidates HSBC’s position as the leading international RMB bank and complements its existing RMB Trade Settlement capabilities in 19 Asia-Pacific markets.

They are Australia, Bangladesh, Brunei, Hong Kong, India, Indonesia, Japan, Kazakhstan, Korea, Macau, Malaysia, Mauritius, New Zealand, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.  

HSBC’S RMB Trade Settlement solution suite provides customers the benefit of reduced exchange costs if buying and selling in RMB, the option to exchange RMB offshore, and the flexibility to receive and hold RMB trade receipts offshore.

Specific RMB Trade Settlement products and services available to customers include RMB Receivables Finance, RMB Trade Settlement Accounts, RMB Remittances, RMB Exchange and RMB Import and Export. The expansion of HSBC’s RMB Trade Settlement capabilities globally is part of the Bank’s greater offshore RMB product and service range.

The expansion of HSBC’s RMB Trade Settlement services to Jordan corresponds to the increased usage of offshore RMB for international trade and payments. According to SWIFT data, global RMB payments expanded by 13.2% month-on-month in March 2012 compared to total worldwide payments growth of 8.6% during the same time period.

Noel Quinn, HSBC’s Regional Head of Commercial Banking, Asia Pacific, said: “We believe that the RMB will be a top three global trade currency within the next five years, playing an increasingly visible role in international trade and payments. As China’s economy continues to evolve on the global stage, the expansion of our international service network will deliver the solutions that globally-minded customers require to conduct trade and settle payments in RMB.”

The development of the RMB as a trade currency is a core component of the Government of the People’s Republic of China’s efforts to internationalise its currency. HSBC forecasts that China policymakers will increase the pace of the RMB internationalisation programme in 2012.

HSBC Corporate Banking Head Chamira Wijetilleke said: “The Chinese renminbi is internationalising rapidly and becoming one of the major currencies in global trade and we are delighted to be the first bank to facilitate RMB trading in the country. Our ability to provide RMB products highlight how HSBC’s local and global capabilities better equip it to support clients’ needs involved in international trade. Having the ability to pay business suppliers directly in RMB will enable customers to maintain a competitive supply chain. We believe that RMB denominated trade will continue to grow cross border, leading to increased demand in Sri Lanka for RMB trade and payment solutions.”

HSBC Global Research estimates that approximately USD2 trillion, or half of China’s annual trade with emerging markets, will be settled in RMB by 2015. At the end of the first quarter of 2012, 10.7% of China’s total trade was settled in RMB, according to recent statistics published by the People’s Bank of China (PBoC). In addition to its increasing use in global trade, HSBC Global Research also forecasts that gross issuance of offshore RMB (‘Dim Sum’) bonds will total between RMB 260-310 billion in 2012 compared to RMB 189 billion in 2011.

Anita Fung, HSBC’s Chief Executive Officer, Hong Kong, said: “Although RMB appreciation will be more modest in 2012, we firmly believe that the internationalisation agenda will remain on course. The first stages of internationalisation will give policymakers heightened confidence in further developing the RMB internationally across trade, capital and investment markets. HSBC’s deepening RMB product and service range provides our customers with a significant advantage as this programme gains momentum.”  

HSBC’s RMB leadership is continually recognised by customers, peers and influential publications. Recently, HSBC ranked first in Asiamoney’s inaugural Offshore RMB Survey 2012, as voted by companies, banks and investors. The bank’s offshore RMB leadership has also been recognised by FinanceAsia as Best Offshore RMB Bond House and by IFR Asia as Dim Sum Bond House of the Year in 2011.