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Haitong Bank's CEO in interview with Lusa: Economies that are better prepared tend to recover faster
Lisbon, 24 March 2020 (Lusa) – The CEO of Haitong Bank, Mr. Wu Min, stated on a written interview to Lusa that "the economies that are better prepared will tend to recover faster" from the crisis caused by the Covid-19 pandemic, and acknowledged "challenges" to the Bank’s strategic plan.
In the interview to Lusa, Mr. Wu Min stated that "no economy will come through unscathed" from this situation and that "the difference will be visible only when the recovery path begins, in which economies that are better prepared tend to recover faster".
"We do not have examples in recent history and in a global scale of a similar limitation to the economic activity, in which people's mobility is reduced, the production chains suffer so many disruptions, and liquidity is reduced so significantly in the credit markets, all of that in a context of debilitated global trade from trade wars and sanitation barriers", Mr. Wu Min told Lusa.
According to the CEO, "the fact that China is one of the most dynamic economies in the world and is one step ahead on the recovery and control of this pandemic situation gives us hope that its recovery is also quite strong and that such recovery can positively be reflected in the global economy".
Mr. Wu Min believes it is not reasonable, for now, to "try to estimate the extent of a global market contraction", but admitted that for the moment, "volatility should remain high as long as countries are suffering from the upsurge of this pandemic, and until its peak".
"As long as uncertainty prevails, risks will remain very high", Haitong Bank’s leader acknowledged, noting the Bank’s previous decision of "reducing exposure to Equities and trading in general".
Mr. Wu Min also refused to compare the current crisis with the one from 2008, since the contraction then was "financial", and the current crisis is a result of a pandemic.
"We do not know yet if this crisis will be worse than the one experienced in 2008, but I believe we will have the means to overcome this pandemic situation and once we reach a new normality to quickly recover the global and national economies", he concluded.
Due to this crisis, the CEO of the Bank that purchased former BESI considered it is "inevitable" to have some constraints to the Bank's activity, and he foresees some "important challenges" to the institutions' strategic plan.
According to Mr. Wu Min, Haitong Bank’s plans for 2020 "could be temporarily postponed", and acknowledged that "after the work developed in the past few years", the Bank is now "in a much more comfortable position not only in terms of capital and liquidity", but also regarding its business model.
"It is important to bear in mind that these difficult times also create opportunity scenarios for institutions with a solid capital position, with liquidity and with the strong support from a Group such as Haitong", the Bank's CEO highlighted.
Referring to the Bank’s 2019 results, Mr. Wu Min stated that they were "the culmination of the work developed throughout the past 2-3 years" in which a "deep transformation in the Bank was carried out involving a new strategy and business model".
Haitong Bank's Net Profit stood at 7.5 million euros in 2019, which includes a one off charge and compares to the 1.1 million euros' Net Profit registered in 2018.
Mr. Wu Min acknowledged that the current crisis led Haitong Bank to "drastically reinforce the Bank's resources to make remote work possible", which helped "understand the current constraints financial institutions face regarding digitalization, but also that it is indeed possible to successfully maintain the Bank's operations without a face-to-face contact".
Haitong Bank stated that its business comes from three main sources: "historical domestic franchises in Iberia, Brazil, Poland and the UK", "China angle" and "cross-border business among these regions and China".
"Haitong Bank is showing that it is possible to anchor an investment bank headquartered in Portugal, leveraging on a strong pool of talent available in this country and from the connection to a broader multinational business", he stated.
Mr. Wu Min believes the Chinese investment in Portugal "has diversified the sources of foreign investment into Portugal, therefore reducing potential vulnerabilities and dependencies from the traditional investor countries", and has "contributed to maintaining decision centres in Portugal".