HSBC has already alienated the US and UK by supporting Beijing’s security legislation on Hong Kong. Without China, the bank would appear friendless © Bloomberg

HSBC shares are trading at levels last seen in the 1990s. Stuck in a no man’s land between the east and the west, the Asia-focused lender has become the target of regular speculative reports. One has warned of a possible blacklisting in China. Another has alleged HSBC was one of several banks flagging suspect transactions to US authorities.

The accuracy of both claims is unclear. HSBC’s Hong-Kong listed shares still fell more than 5 per cent on Monday, extending their drop to more than 50 per cent this year.

The threat of blacklisting should worry investors most. China’s Ministry of Commerce has been compiling an “unreliable entities” list. Constituents could be banned from investing in China and could see their employees’ work permits revoked.

Both measures would be particularly awkward for HSBC, which Beijing resents for its involvement in a US probe into Chinese telecoms equipment group Huawei.

HSBC has invested heavily in the mainland. The lender wants to hire up to 3,000 wealth management employees for its mainland China business over the next four years. More than half of the hires would be in the Greater Bay Area, where it expects its banking revenues to rise sharply by 2025. Its China-based IT centres have become a crucial part of group operations.

The strategy has been paying off. The mainland China business has continued growing through the pandemic. Even as group net profits fell nearly two-thirds in the first half, the division posted $1.5bn of pre-tax profits.

Without China, HSBC would appear friendless. It has alienated the US and UK by publicly supporting Beijing’s new security legislation on Hong Kong. Its operations in North America and Europe weigh on earnings. European losses widened almost sixfold to more than $3bn in the first half.

Businesses that have become political shuttlecocks are not worthwhile investments. Unpredictable policy shifts set share prices rather than strategy or economics. Bosses once teased the UK with suggestions HSBC might move headquarters to Hong Kong. It is now seems equally unpopular in both places.

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