Earlier this year, the bank’s biggest investor, the state-run Chinese insurer Ping An, called for HSBC to be split into eastern and western units, arguing that it would be impossible to straddle both regions in the coming years.
Seven global banks have investment banking operations in mainland China, including HSBC, Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley, UBS and Deutsche Bank.
Executives at these banks are said to be worried about the optics of potentially exposing strategic decisions and client data to the CCP, according to The Financial Times, which first reported the story citing two people familiar with the decision at HSBC.
While it is not uncommon for banks to hire state officials in senior positions, financial institutions have stopped short of giving Beijing a firm hand in running their businesses.
One head of Asia at an international bank told the paper: “There was an internal email that said we might need to do something, but for the time being… it is not yet compulsory.”
HSBC said: “Employees of private firms in China are able to form a Party branch. These branches are common and can be set up by as few as three employees.
“It is important to note that management has no role in establishing such groups, they do not influence the direction of the business, and have no formal role in the day to day activities of the business. HSBC does not track the political affiliation of its employees.”