Hong Kong banks ready SARS contingency plans

Stuart Fagg
07 Apr 2003

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HSBC was first to react to Severe Acute Respiratory Syndrome (SARS), which has now caused 75 deaths, mainly in mainland China and Hong Kong. Anticipating measures outlined by the Hong Kong Monetary Authority (HKMA) last Wednesday (April 2), the bank sent home 50 dealing staff, including FX and fixed-income trading, sales and back-office personnel, on March 28.

“They have been asked to stay home for the incubation period of this virus,” a spokesperson for HSBC in Hong Kong told sister publication FX Week. “Not because they have it, but to ensure that those 50 staff are clear should anything happen to the main dealing room.” Those dealers start work at the bank’s back-up trading floor in Kowloon today in order to take over dealing from the bank’s main site in the event of dealers there becoming infected.

ABN Amro and Citigroup both declined to comment on whether they have followed the HKMA’s advice for back-up dealing operations, but both said they had contingency plans in place.

“ABN Amro has taken all necessary and appropriate precautions to ensure the safety and well-being of its staff and clients. These are being constantly reviewed and updated in accordance with any new information provided by government and health officials,” said a London spokesperson for ABN Amro, which has a large trading centre in Hong Kong Citigroup’s spokesperson in the centre said the bank could not disclose details of its plan.

Some banks have transferred Hong Kong dealing operations to alternative Asian centres, the HKMA said. While some, including ABN Amro and Deutsche Bank, have also imposed travel restrictions to the region.

The World Health Organisation last week advised against travel to both Hong Kong and mainland China as a result of the virus.

FX traders in Hong Kong said the situation is now having some impact on financial markets. “There are big deals which aren’t going through because the guys doing them have been quarantined,” said one FX dealer at a European bank in Hong Kong. “We are down by a few and people are getting nervous.”

And while the virus outbreak has had a limited effect on Asian currencies, analysts warned that the economic impact on Hong Kong and Asia could become a negative factor. “We already have the shock and uncertainty of war, and now SARS is also bringing added uncertainty to the region,” said Claudio Piron, head of foreign exchange strategy at Standard Chartered Bank in Singapore. “Markets have gone through the emotional stage and are now looking at things more rationally.”