Wells Fargo, America’s fourth-largest bank by assets, has been quietly working on a plan to move its Asian regional hub from Hong Kong to Singapore as part of wider restructuring efforts.
The move comes as the bank is drastically cutting costs and during a tumultuous time for Hong Kong, where Chinese authorities introduced a national security law last year to counter persistent anti-government protests.
The plan would involve slowly building up Singapore as Wells Fargo’s Asian hub through a mixture of new hires and redundancies in Hong Kong, according to four people with knowledge of the matter. It would still maintain a presence in the territory. One former employee said the plan was dubbed internally “project sun”.
As of 2017 Wells Fargo had 1600 staff in Asia-Pacific, the bank said at the time. It currently employs 1300 people in the region, according to the LinkedIn page of regional head Jafar Amin. Wells Fargo declined to confirm its regional headcount or quantify planned job losses in Asia.
Over the past few months Wells Fargo has slowly made a number of senior executives in Hong Kong and elsewhere in Asia redundant. The lender has scaled back in other locations in the region and is in the process of closing its offices in Thailand, Bangladesh and the Philippines.
“Wells Fargo has a long-term presence in Hong Kong, Singapore and the Apac region, including Japan and mainland China, and we will continue to maintain this presence,” the bank said. “Suggestions we are moving our focus away from Hong Kong do not accurately reflect our commitment to this market.”
The plan is motivated by saving money from reducing Wells Fargo’s exposure to Hong Kong’s expensive real estate market, and by geopolitical uncertainty in the city and fears over whether this will lead to more onerous compliance issues, according to two of the people with knowledge of the plan.
Previously, Wells Fargo staff who were responsible for covering the Asia-Pacific region had been based in Hong Kong, but now many of these jobs are being advertised on its website as either being based in Singapore or offering a choice between the two locations.
Wells Fargo, which is led by chief executive Charlie Scharf, said in January it had 250 “efficiency initiatives” under way and could cut as much as $8bn from its cost base over the next three to four years. It has vowed to slash 250 bank branches this year.
Globally, the bank’s headcount fell by 6,400 to 268,500 in the last three months of 2020.
Location is a sensitive topic for US banks operating in Hong Kong, who fear any impact on their China business were they to be perceived to be pulling out of the city.
Singapore, a growing centre for start-ups and technology companies, has been seen as a beneficiary of the tensions arising from the new security law, due to its relative political stability and proximity to Hong Kong.
Despite the perception of heightened political risk, however, few banks or financial institutions have left Hong Kong altogether, owing in part to their growing and prosperous China businesses.