WEBVTT - HSBC US CEO Lisa McGeough Talks Market Outlook

0:00:02.520 --> 0:00:08.920
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. I'm standing by, of course,

0:00:08.960 --> 0:00:13.239
<v Speaker 1>with Lisa Miguel, who is the USEO of HSBC as

0:00:13.280 --> 0:00:15.440
<v Speaker 1>well as the head of Banking. And it is your

0:00:15.480 --> 0:00:18.880
<v Speaker 1>first interview live since taking the role. You started on

0:00:18.920 --> 0:00:21.960
<v Speaker 1>the first day of January. Yes, you've been moving very

0:00:22.040 --> 0:00:25.400
<v Speaker 1>quickly and have you been met with the craziest markets?

0:00:25.440 --> 0:00:27.800
<v Speaker 1>Could you have expected that this is what you'd be

0:00:27.840 --> 0:00:28.480
<v Speaker 1>walking into.

0:00:28.760 --> 0:00:30.920
<v Speaker 2>Well, thank you so much, Janelli, It's an honor to

0:00:30.960 --> 0:00:34.560
<v Speaker 2>be here. I'm just absolutely thrilled. So look, this is

0:00:34.600 --> 0:00:37.400
<v Speaker 2>a fantastic role as CEO for the US. It is

0:00:37.440 --> 0:00:40.599
<v Speaker 2>a really interesting time to be in the US. The

0:00:40.640 --> 0:00:45.360
<v Speaker 2>market volatility is challenging for clients we have. We're very

0:00:45.400 --> 0:00:48.280
<v Speaker 2>proud of our global connectivity, our global network, the product

0:00:48.280 --> 0:00:52.000
<v Speaker 2>depth that we have, but clients are using this now

0:00:52.040 --> 0:00:55.320
<v Speaker 2>more than ever to help navigate a very difficult environment.

0:00:55.400 --> 0:00:57.600
<v Speaker 1>Yeah, speaking to the environment a little more. The unique

0:00:57.640 --> 0:01:01.440
<v Speaker 1>view you have is HSBC is big global bank and

0:01:01.840 --> 0:01:03.800
<v Speaker 1>for the first time in a long time, you're seeing

0:01:03.840 --> 0:01:08.120
<v Speaker 1>Europe outperform, You're seeing Asia also outperform, and that American

0:01:08.160 --> 0:01:11.360
<v Speaker 1>exceptionalism story come under question. What does that look like

0:01:11.400 --> 0:01:13.480
<v Speaker 1>from your view? And is it sustainable.

0:01:13.760 --> 0:01:17.040
<v Speaker 2>Yes, it's a great question. So we're helping our clients

0:01:17.120 --> 0:01:19.319
<v Speaker 2>navigate the tariffs. Tariffs are nothing new. We have one

0:01:19.400 --> 0:01:21.400
<v Speaker 2>hundred and sixty years of experience, one hundred and fifty

0:01:21.440 --> 0:01:24.680
<v Speaker 2>years in the United States, so we've navigated tariffs before,

0:01:25.000 --> 0:01:27.200
<v Speaker 2>I think. And by the way, we're the number one

0:01:27.520 --> 0:01:30.160
<v Speaker 2>trade bank in the world, did eight hundred and fifty

0:01:30.160 --> 0:01:33.320
<v Speaker 2>seven billion of trade financing last year, So clients need

0:01:33.319 --> 0:01:36.880
<v Speaker 2>our insights now more than ever. I think the challenges

0:01:36.959 --> 0:01:41.880
<v Speaker 2>in the US, Yes, there's uncertainty policy uncertainty. By the way,

0:01:41.920 --> 0:01:45.160
<v Speaker 2>there's still two conflicts on in the world, and so

0:01:45.959 --> 0:01:50.320
<v Speaker 2>leveraging our fifty plus country presence and the expertise that

0:01:50.360 --> 0:01:52.840
<v Speaker 2>we have and the experience that we have developed over

0:01:52.840 --> 0:01:57.120
<v Speaker 2>the years helping clients navigate. You know, I don't think

0:01:57.240 --> 0:02:00.000
<v Speaker 2>that I think clients got a great experience through COVID,

0:02:00.120 --> 0:02:02.600
<v Speaker 2>as much as that sounds, they have the ability to

0:02:03.120 --> 0:02:06.440
<v Speaker 2>navigate a very difficult time and adjust their supply chains.

0:02:06.680 --> 0:02:09.040
<v Speaker 2>So some of those learnings are actually coming into handy.

0:02:09.400 --> 0:02:11.720
<v Speaker 1>Yeah, what does that look like now with that kind

0:02:11.760 --> 0:02:15.240
<v Speaker 1>of experience in the world of trade, trade finance, does

0:02:15.480 --> 0:02:18.800
<v Speaker 1>this set of tariff pressures coming from the United States

0:02:18.800 --> 0:02:24.000
<v Speaker 1>and even reciprocally. Is it jarring to your clients. Is

0:02:24.040 --> 0:02:26.640
<v Speaker 1>it something that is stopping activity in a way that

0:02:26.760 --> 0:02:28.040
<v Speaker 1>is going to be difficult to bring back.

0:02:28.120 --> 0:02:31.440
<v Speaker 2>Yeah, it's a great question. I think it is difficult

0:02:31.520 --> 0:02:35.720
<v Speaker 2>to make long term strategic decisions today. Now we're going

0:02:35.720 --> 0:02:37.959
<v Speaker 2>to know more about the tariffs and what exactly is

0:02:38.000 --> 0:02:42.160
<v Speaker 2>happening April second, so we're standing by on that. However,

0:02:42.440 --> 0:02:45.360
<v Speaker 2>trade needs to happen every day and their flows that

0:02:45.400 --> 0:02:49.120
<v Speaker 2>are important to continue to support. I think clients are

0:02:49.400 --> 0:02:53.519
<v Speaker 2>hesitating a bit on the long term decisions. However, most

0:02:53.600 --> 0:02:56.400
<v Speaker 2>of them are fairly diversified in their supply chains, so

0:02:56.440 --> 0:03:01.600
<v Speaker 2>they can work really well despite the noise. I think

0:03:01.680 --> 0:03:04.639
<v Speaker 2>the other thing about the US is that, yes, there

0:03:04.680 --> 0:03:07.360
<v Speaker 2>might be some weakness in the stock market, Yes GDP

0:03:07.520 --> 0:03:10.480
<v Speaker 2>might moderate, Yes there may be inflation. But we're also

0:03:10.560 --> 0:03:13.760
<v Speaker 2>helping clients do business all around the world, and there

0:03:13.800 --> 0:03:17.920
<v Speaker 2>are growth corridors in areas where we can support what

0:03:18.000 --> 0:03:18.680
<v Speaker 2>they need to do.

0:03:19.160 --> 0:03:21.680
<v Speaker 1>What are those growth corridors, Because back to the question

0:03:21.720 --> 0:03:26.079
<v Speaker 1>about US investors looking to put money abroad, Yes, how

0:03:26.240 --> 0:03:28.440
<v Speaker 1>much are they doing so? How much are they coming

0:03:28.480 --> 0:03:30.120
<v Speaker 1>to you? And said we want to invest our dollars

0:03:30.160 --> 0:03:32.560
<v Speaker 1>outside of the US terra for no terrifs.

0:03:32.680 --> 0:03:35.520
<v Speaker 2>Yes, So it gets to a bit about the importance

0:03:35.560 --> 0:03:39.000
<v Speaker 2>of the US as a deep capital market with you know,

0:03:39.560 --> 0:03:43.240
<v Speaker 2>investors that have significant capital to put to work globally,

0:03:43.600 --> 0:03:46.600
<v Speaker 2>so they are looking to US. I would say there

0:03:46.600 --> 0:03:48.760
<v Speaker 2>are a couple of exciting corridors that we look at.

0:03:48.760 --> 0:03:51.280
<v Speaker 2>One is probably India. You know, six and a half

0:03:51.280 --> 0:03:54.160
<v Speaker 2>percent GDP growth, a billion and a half population, that

0:03:54.440 --> 0:03:57.119
<v Speaker 2>made an India trend. You know, we have a significant

0:03:57.120 --> 0:04:00.480
<v Speaker 2>presence in India, so our history there that's been wonderful,

0:04:00.520 --> 0:04:02.760
<v Speaker 2>the US to India corridor. The other is the Middle

0:04:02.800 --> 0:04:05.800
<v Speaker 2>East with UAE and Saudi the Kingdom of Saudi Arabia,

0:04:06.000 --> 0:04:07.880
<v Speaker 2>where we've been for one hundred and thirty years. We

0:04:07.920 --> 0:04:11.080
<v Speaker 2>have six thousand people, we're three times biggest and bigger

0:04:11.080 --> 0:04:15.320
<v Speaker 2>than the next competitor. And then probably Southeast Asia, Vietnam,

0:04:15.360 --> 0:04:19.080
<v Speaker 2>Indonesia and Thailand. Again, these are areas where I think

0:04:19.120 --> 0:04:22.560
<v Speaker 2>we've got five thousand trade specialists in over fifty countries,

0:04:22.600 --> 0:04:25.280
<v Speaker 2>so we've got the ability to help clients navigate today.

0:04:25.360 --> 0:04:26.960
<v Speaker 1>What about the other way around, how do you talk

0:04:27.000 --> 0:04:29.960
<v Speaker 1>to your counterparts across HSBC in terms of the interest

0:04:30.000 --> 0:04:33.320
<v Speaker 1>coming into the United States. Yes, are people putting dollars

0:04:33.320 --> 0:04:36.360
<v Speaker 1>to work right now on that US exceptionalism story. Are

0:04:36.360 --> 0:04:38.719
<v Speaker 1>they holding off the way you see the public market

0:04:38.720 --> 0:04:40.119
<v Speaker 1>investors doing so now?

0:04:40.360 --> 0:04:44.120
<v Speaker 2>Yes, so I am. I am seeing still investment commitment

0:04:44.160 --> 0:04:47.640
<v Speaker 2>in the United States. And we were just with Governor

0:04:47.680 --> 0:04:51.440
<v Speaker 2>Kathy Hochel and talking through this last week. So there

0:04:51.600 --> 0:04:54.840
<v Speaker 2>is there are new plants, there are commitments. I think

0:04:54.880 --> 0:05:00.200
<v Speaker 2>the PIF made a significant commitment to the President. We

0:05:00.279 --> 0:05:03.960
<v Speaker 2>are still seeing that commitment and you know, the plants

0:05:03.960 --> 0:05:07.719
<v Speaker 2>and the investments in infrastructure. If you think about the CHIPSAC,

0:05:07.800 --> 0:05:10.880
<v Speaker 2>the Inflation Reduction Act, the size and scale of the

0:05:10.920 --> 0:05:14.760
<v Speaker 2>population we are, what do we do twenty nine trillion

0:05:14.760 --> 0:05:18.120
<v Speaker 2>of GDP last year, It's a quarter of the global GDP.

0:05:18.480 --> 0:05:21.720
<v Speaker 2>It's a big consumer market. So you know, the depth,

0:05:22.200 --> 0:05:26.440
<v Speaker 2>scale and ability to grow your business in the US

0:05:26.520 --> 0:05:30.400
<v Speaker 2>is really unparalleled. So we're helping on the inbound side

0:05:30.440 --> 0:05:32.760
<v Speaker 2>as well as the outbound side. But I also think

0:05:32.839 --> 0:05:36.000
<v Speaker 2>that you know, helping clients navigate where should they invest

0:05:36.360 --> 0:05:39.760
<v Speaker 2>where should they build? Are two different things, but we're

0:05:39.880 --> 0:05:41.040
<v Speaker 2>uniquely qualified to do that.

0:05:41.120 --> 0:05:45.039
<v Speaker 1>They're helping clients manage large strategic decisions at a time

0:05:45.040 --> 0:05:49.320
<v Speaker 1>where HSBC is making massive strategic decisions of its own.

0:05:49.680 --> 0:05:53.400
<v Speaker 1>Your CEO, George L. Heathery, had taken over back in September.

0:05:53.720 --> 0:05:56.760
<v Speaker 1>Took over just in January of the US division. He

0:05:56.839 --> 0:05:59.760
<v Speaker 1>said in February that the company is finalizing a review

0:05:59.760 --> 0:06:02.839
<v Speaker 1>of the investment banking divisions. You've scaled back in a

0:06:02.880 --> 0:06:05.240
<v Speaker 1>big way in the United States, So what does your

0:06:05.320 --> 0:06:08.200
<v Speaker 1>business look like today? Where are you not and where

0:06:08.240 --> 0:06:09.360
<v Speaker 1>are you going to operate?

0:06:09.640 --> 0:06:12.000
<v Speaker 2>It's a great question. First of all, I'm thrilled you

0:06:12.040 --> 0:06:15.359
<v Speaker 2>know that George is taking these decisions, because when you

0:06:15.520 --> 0:06:18.240
<v Speaker 2>run a one hundred and sixty year old financial institution,

0:06:18.800 --> 0:06:21.400
<v Speaker 2>you have to be really clear about where you're deploying

0:06:21.400 --> 0:06:24.919
<v Speaker 2>your resources. So that'll be capital, talent investments, and you

0:06:24.960 --> 0:06:27.960
<v Speaker 2>want to invest in technology and AI and continue to grow.

0:06:28.480 --> 0:06:32.040
<v Speaker 2>So he's taken some very bold decisions. He's aligned our

0:06:32.080 --> 0:06:35.960
<v Speaker 2>company into you know, the UK Hub, the Hong Kong Hub,

0:06:36.279 --> 0:06:40.920
<v Speaker 2>the Corporate and Institutional bank, and international wealth and Premiere Banking.

0:06:41.480 --> 0:06:46.440
<v Speaker 2>That's fantastic. It's simplified, it's agile, it's more client focused.

0:06:46.800 --> 0:06:49.560
<v Speaker 2>I think we had an opportunity to do that, and

0:06:49.600 --> 0:06:53.560
<v Speaker 2>he's moving at pace. So here in the US, the

0:06:53.640 --> 0:06:57.200
<v Speaker 2>US contributes significantly over five billion last year to Asia

0:06:57.200 --> 0:07:01.680
<v Speaker 2>in the Middle East through trade immense FX and our

0:07:02.200 --> 0:07:05.680
<v Speaker 2>broader markets business as well as financing. So we're a

0:07:05.720 --> 0:07:09.360
<v Speaker 2>three trillion dollar bank. We are significant, so we can

0:07:09.360 --> 0:07:11.960
<v Speaker 2>support clients in financing. That'll be deck capital markets and

0:07:12.040 --> 0:07:15.960
<v Speaker 2>leverage finance. In the global transaction banking, it'll be as

0:07:16.000 --> 0:07:18.720
<v Speaker 2>I said, the payments business where we processed five hundred

0:07:18.760 --> 0:07:21.560
<v Speaker 2>trillion last year, we do one hundred and eighty eight

0:07:21.840 --> 0:07:26.160
<v Speaker 2>trades a second. And then we also have FAX where

0:07:26.160 --> 0:07:29.680
<v Speaker 2>we're trading at one hundred and thirty currencies as well

0:07:29.680 --> 0:07:31.840
<v Speaker 2>as the trade I referred to. So these are really

0:07:32.520 --> 0:07:35.760
<v Speaker 2>amazing sort of jewel of the crown type of businesses

0:07:36.320 --> 0:07:39.080
<v Speaker 2>and the ability to help clients navigate. So in the US,

0:07:39.160 --> 0:07:41.200
<v Speaker 2>that's where we're going to be focused on the global

0:07:41.200 --> 0:07:45.400
<v Speaker 2>transaction banking and the financing. You know, M and A inequities,

0:07:45.800 --> 0:07:49.160
<v Speaker 2>we were less competitive, so I think, you know, making

0:07:49.200 --> 0:07:53.320
<v Speaker 2>sure that where we have strengths is where we focus.

0:07:53.480 --> 0:07:55.480
<v Speaker 1>How do you explain the commitment that you have to

0:07:55.560 --> 0:07:58.520
<v Speaker 1>the existing investment banking businesses because m and A for

0:07:58.560 --> 0:08:00.160
<v Speaker 1>a lot of other banks had been kind of the

0:08:00.200 --> 0:08:02.840
<v Speaker 1>core of the operation. But you're making debt capital markets.

0:08:02.840 --> 0:08:04.160
<v Speaker 1>It seems like the.

0:08:04.160 --> 0:08:06.880
<v Speaker 2>Core and leverage finance well, because we have the balance

0:08:06.920 --> 0:08:09.800
<v Speaker 2>sheet and we have the ability to support clients in

0:08:09.840 --> 0:08:13.680
<v Speaker 2>our lending multiple lending products, which is highly correlated to

0:08:13.920 --> 0:08:16.960
<v Speaker 2>the capital markets, and so allowing them to access the

0:08:17.000 --> 0:08:21.520
<v Speaker 2>debt capital markets wherever they want to issue is really

0:08:21.520 --> 0:08:26.680
<v Speaker 2>important on the leverage finance side as well. Our financing,

0:08:26.840 --> 0:08:30.040
<v Speaker 2>our powerhouse, our ability to help clients grow and build

0:08:30.600 --> 0:08:35.400
<v Speaker 2>is really unparalleled. So those are our power alleys and

0:08:35.520 --> 0:08:38.400
<v Speaker 2>can help us on the international side to navigate and

0:08:38.440 --> 0:08:40.440
<v Speaker 2>help clients navigate as they grow the business.

0:08:40.600 --> 0:08:42.720
<v Speaker 1>So if you think about the global scale of HSBC

0:08:42.920 --> 0:08:46.040
<v Speaker 1>and the transformation that the bank is enduring, where do

0:08:46.120 --> 0:08:48.920
<v Speaker 1>you say the US is in that transformation story?

0:08:49.200 --> 0:08:52.320
<v Speaker 2>So the US is on a fantastic path and we

0:08:52.320 --> 0:08:55.120
<v Speaker 2>were ahead. I mean, I think we talked about I

0:08:55.160 --> 0:08:57.360
<v Speaker 2>packed my bags and I was here in a few

0:08:57.440 --> 0:09:00.679
<v Speaker 2>days to start, and so we're moving it and I

0:09:00.720 --> 0:09:04.400
<v Speaker 2>haven't seen an organization move this fast in banking. But

0:09:04.640 --> 0:09:08.080
<v Speaker 2>the US is again, you know, the core of the

0:09:08.120 --> 0:09:10.760
<v Speaker 2>business we have in a market share perspective. If you

0:09:10.800 --> 0:09:13.880
<v Speaker 2>think about where HSBC is strongest, we're the number one

0:09:13.880 --> 0:09:16.520
<v Speaker 2>in market share in every product that we care about,

0:09:16.920 --> 0:09:19.840
<v Speaker 2>so you know, payments trade effects a couple of markets again,

0:09:19.960 --> 0:09:24.040
<v Speaker 2>so that is amazing. The other thing to think about

0:09:24.160 --> 0:09:27.359
<v Speaker 2>is that we can bank clients from an innovation banking perspective.

0:09:27.400 --> 0:09:30.280
<v Speaker 2>We have one hundred bankers that are focused on you know,

0:09:30.640 --> 0:09:35.760
<v Speaker 2>healthcare and technology and you know just venture venture stage companies,

0:09:36.559 --> 0:09:39.200
<v Speaker 2>like over a thousand of them. And you know that

0:09:39.280 --> 0:09:42.160
<v Speaker 2>team that we we were able to get from SVB,

0:09:42.600 --> 0:09:45.079
<v Speaker 2>amazing team run by Dave Sabao who's based in the

0:09:45.160 --> 0:09:49.160
<v Speaker 2>United States. As those clients grow and build, we can

0:09:49.200 --> 0:09:51.479
<v Speaker 2>support them as they expand overseas.

0:09:51.760 --> 0:09:56.319
<v Speaker 1>Really an amazing transformation story. Lisa miguel Us, CEO of HSBC,

0:09:56.440 --> 0:09:59.239
<v Speaker 1>we thank you for sharing the story of the transformation

0:09:59.280 --> 0:10:01.360
<v Speaker 1>of the bank and of course for clients are looking

0:10:01.400 --> 0:10:02.520
<v Speaker 1>to invest today.