Bank of America, the second-largest US bank by assets, has started a review of its Hong Kong business to identify workers who can be relocated to Singapore as severe pandemic control measures have forced global businesses to re-evaluate their operations in the Chinese territory.
The bank’s management is considering roles in a number of its business lines and operations, according to a person close to the bank. “It is [in the] early stages of figuring out who might want to go . . . but the process has started,” the person added.
A second person close to the bank described the process as “contingency planning” and said the moves could be permanent or temporary while Covid-19 restrictions on travel persist.
It is not yet known how many people will be relocated and a wholesale move of any business or operation is unlikely. Bank of America declined to comment.
The review is being co-ordinated by Richard Yacenda, the bank’s chief operating officer for Asia-Pacific, according to the people. It will also consider the tax and regulatory issues related to relocating some job roles.
Hong Kong’s strict coronavirus regime, which involves 21 days of quarantine for international arrivals, has made it ever more difficult for executives to use the city as a regional hub. Passenger flights to eight countries, including the UK and US, have been banned and air freight services reduced.
The Omicron outbreak has increased pressure on the territory’s zero-Covid strategy, with Hong Kong tightening pandemic controls this month. International business groups have expressed concern that the city has not articulated an exit strategy and is becoming cut off from the world, leading to an exodus of talent and problems for global businesses that recruit overseas.
In October, global banks warned the Hong Kong government that the territory’s status as an international financial centre was at risk because of “highly restrictive” coronavirus policies that stifle foreign travel.
Wells Fargo, America’s fourth-largest bank by assets, was last year quietly working on a plan to move its Asian regional hub from Hong Kong to Singapore as part of wider restructuring efforts.
Bonus season, which runs until April at global banks, has heightened anxiety over exits among both foreign and local workers who have been unable to travel freely for two years.
After reporting record profits in 2021, Bank of America is handing out its biggest pay awards since it started giving out additional bonuses tied to company performance six years ago, according to an internal memo sent by chief executive Brian Moynihan on Tuesday and seen by the Financial Times.
The bank will give 97 per cent of its 208,000 employees restricted stock awards worth roughly $1bn in total, but bankers will have to stick around to earn their payday in full. The special stock awards will vest in equal payments over four years starting in 2023.