Hong Kong's Hang Seng Repeats as World's Strongest Bank

Hang Seng Bank can offer some advice to its ailing parent, HSBC Holdings: Stay local, stick to retail and commercial banking, and serve your customers snake soup. From its base in Hong Kong, Hang Seng tops Bloomberg Markets’ ranking of the world’s strongest banks for the second year in a row—by being everything HSBC isn’t. While the two share roots in Hong Kong, HSBC embarked on a global expansion to become Europe’s largest lender. It moved its headquarters to London in 1993 and set up shop in almost every major country.

Now, HSBC is struggling to reduce costs. The 150-year-old bank, which bought its first stake in Hang Seng in 1965 and today owns 62 percent, has announced about 87,000 job cuts since 2011. “The time of the global financial conglomerates is coming to an end,” says Ismael Pili, a Hong Kong–based analyst at Macquarie Group who rates Hang Seng underperform. “What you should really be doing is trying to be strong in your domestic market.” Gareth Hewett, an HSBC spokesman in Hong Kong, declined to comment.