The board of HSBC Holdings, which owns two of Hong Kong's three biggest banks, is to meet this week to investigate the potential impact of the Sars (Severe acute respiratory syndrome) virus, which has killed more than 200 people worldwide. The report has been prepared by the bank's Hong Kong division and will be discussed at a board meeting in London on Friday.
David Eldon, the chairman of HSBC and Hang Seng Bank, said: "It's hard to say the actual impact on HSBC [because] this has been with us for a relatively short space of time. A lot is going to depend upon how quickly we'll return to a degree of what I would describe as normality."
HSBC has already introduced emergency measures to combat the potentially deadly flu-like virus, such as disinfecting its Hong Kong buildings at regular intervals, providing face masks to staff and discouraging non-essential travel. It has sent home 50 Hong Kong staff who definitely do not have the virus in order to create a reserve group of employees should the outbreak worsen.
The bank has temporarily closed branches in the areas worst affected by the disease and last month sent home more than two dozen staff from its headquarters after one was diagnosed with the illness.
The bank is also experiencing a surge in its internet banking service as customers try to avoid visiting branches. It is understood internet banking numbers are up by 40 per cent.
HSBC's Hong Kong units and their rivals are struggling to cope as the disease dampens growth in the city of seven million people. Hotels, restaurants and airlines have reported a slump in business as people try to avoid exposure to the infection. There have been concerns that the unemployment rate may rise as businesses scale back, causing a rise in defaults and bad-loan provisions.
More than 200 people have died because of Sars in Asia, most of them in Hong Kong and China, since the outbreak last month.
Mr Eldon, who heads up the group's main Asian operations, says the impact of Sars on HSBC is "immaterial" so far, partly because of its diversified operations globally. "The bank will only say something specifically about the impact of Sars if it's going to make a material difference to the results," he said.
Standard Chartered is also likely to be hit as it has substantial operations in South-east Asia. Banking analysts are expected to cut profit forecasts for banks with heavy Asian exposure as the economic impact of Sars spreads.
Two major metals conferences due to take place in the Far East have been postponed due to the outbreak. Metal Bulletin has postponed a conference that was due to take place in Shanghai between 22 and 25 April. The Cobalt Development Institute has called off its annual conference scheduled for Hong Kong on 14 and 15 May.
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies