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HSBC wants to bolster its position as top bank for high net worth and ultra high net worth clients in Asia, investing US$3.5 billion and hiring more than 5,000 people in its wealth management business over the next five years as it doubles down on future growth in the region.
As part of his latest strategy update on Tuesday, HSBC CEO Noel Quinn said the bank plans to invest US$6 billion in total in the region over the next five years and shift capital from underperforming businesses in Europe and the United States. The London-based lender generated 53 per cent of its revenue in Asia last year.
That will include a significant investment in its wealth management business as it targets wealthy clients in mainland China, Hong Kong and Singapore, as well as other parts of the region, senior executives said.
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The bank previously announced plans to hire as many as 3,000 wealth managers in mainland China by 2025 and now plans to add an additional 2,000 relationship managers, investment counsellors and other customer-facing roles in Asia in the coming years.
"In the next five years, we plan to extend private banking in mainland China to 10 cities and more than double our Jade client base in mainland China and Singapore, where we will bolster our international wealth credentials," said Greg Hingston, regional head of HSBC's wealth and personal banking business.
The bank's Premier and Jade products alone had a combined US$780 billion globally in deposits and assets under management in 2020. Jade accounts, for example, require a minimum relationship balance of HK$7.8 million (US$1 million) to qualify.
In total, Asia accounted for nearly half of HSBC's US$1.6 trillion in balances in its wealth business and 65 per cent of the group's wealth revenue, the bank said.
Fitch Ratings said the increased investment and emphasis on Asia should mitigate some of the effects of historically low interest rates on revenue and plays into the bank's "franchise strengths".
HSBC recently hired singer and actor Aaron Kwok Fu-shing as an ambassador to promote its Jade products. Photo: Dickson Lee alt=HSBC recently hired singer and actor Aaron Kwok Fu-shing as an ambassador to promote its Jade products. Photo: Dickson Lee
"We believe that the group's strong footprint in the region is a firm starting point for further expansion," Fitch analysts Ioana Sima and Marc Ellsmore said in a research report on Wednesday. "Nevertheless, we expect competition for capital-light, fee-generating and sustainability focused business in Asia to increase over the medium term, as the bank's global and local peers tackle the same operating environment challenges."
Last year, the bank introduced a digital-first, hybrid financial planning wealth platform known as HSBC Pinnacle in mainland China to capture growing wealth there.
It hired 200 wealth planners in Shanghai, Hangzhou, Guangzhou and Shenzhen last year and plans to add another 600 this year, according to Nuno Matos, the CEO for wealth and private banking.
"Our wealth advancement is well under way," Matos said on an analyst call on Tuesday. "We've made the necessary structural changes. The plans are well defined. We have bold, but achievable ambitions. We are in full execution mode, particularly in Asia, but also in our global wealth hubs."
Matos is one of three senior executives, alongside the head of HSBC's investment bank and commercial bank, that the bank is reportedly considering to relocate to Asia.
Quinn did not confirm the moves on Tuesday, but said the bank was considering locating some business heads in Hong Kong because it would be "good to have them closer to where the opportunity for growth is and to serve our clients in Asia directly."
HSBC's wealth business also hopes to capitalise on further integration between Hong Kong and other cities in the Greater Bay Area (GBA), including the planned Wealth Connect cross-border scheme.
The bank recently hired Aaron Kwok Fu-shing, one of Canto-pop's "Four Heavenly Kings", as an ambassador to promote Jade investment schemes targeted at the GBA and appointed Daniel Chan Hing-yiu to head its new GBA office.
"Asian wealth onshore and overseas, offers one of the most compelling growth opportunities today," Hingston said. "We are connecting Asian clients to the world and the world to Asian expertise as we see greater client demand to diversify into wealth."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.