Some Global Banks Break Ties With Huawei Margot Patrick in London and Julie Steinberg in Hong Kong
Two banks that helped power the Chinese company’s rise as a global technology supplier, HSBC Holdings HSBC 1.59% PLC and Standard Chartered STAN -0.44% PLC, won’t provide it with any new banking services or funding after deciding that Huawei is too high risk, people familiar with those decisions said.
While HSBC made its decision last year, Standard Chartered moved more recently as concerns about Huawei escalated this year from a Justice Department investigation into whether the company violated U.S. sanctions on Iran, some of the people said.
A third key bank, Citigroup Inc., C -1.04% continues to provide Huawei with day-to-day banking services outside the U.S., people familiar with that relationship said. New banking business would be subject to review, and Citigroup is monitoring developments in the U.S., the people said.
This month, Huawei finance chief Meng Wanzhouwas arrested in Canada and awaits possible extradition to the U.S. to face charges over alleged sanctions violations and bank fraud. Her arrest has heightened trade tensions between the U.S. and China and has resulted in a diplomatic spat between China and Canada. Ms. Meng, who denies any wrongdoing, is out on bail with strict limits on her movements.
Huawei, active in about 170 countries, relies on international banks to manage cash, finance trade and fund its operations and investments. For more than a decade, HSBC, Standard Chartered, and Citigroup plugged Huawei into the global financial system as it entered new markets, providing the maker of telecommunications equipment with everything from foreign currencies to bond funding from Western investors.