HSBC to target wealth management in latest strategic shift

People walk past a major branch of HSBC at the financial Central district in Hong Kong, China February 21, 2017. REUTERS/Bobby Yip

HSBC Holdings Plc’s search for growth is targeting wealth management as a potential new profit engine as it deepens its focus on Asia.

In a presentation this week outlining the embattled lender’s second strategic reset in a year, Chief Executive Officer Noel Quinn told about 250 top managers that HSBC aims to become one of the world’s biggest wealth managers.

Quinn said on the Tuesday call that the bank would “invest at scale” where it sees the greatest opportunity, pointing to Asia, the U.K. and the Middle East as likely areas for expansion, according to a document seen by Bloomberg. A spokeswoman for HSBC declined to comment for this article.

While HSBC is the biggest international bank in China and the largest lender in Europe, it’s a relative minnow in the business of managing assets for the world’s wealthiest investors. It oversaw just over $361 billion of assets on behalf of its wealthiest customers at the end of 2019. UBS Group AG, the world’s biggest wealth manager, had $2.6 trillion of assets under management.

In 2019, about 65% of the $8.6 billion in adjusted revenue generated by HSBC’s wealth management and private banking operations came from Asia, according to an August presentation by the bank at a Goldman Sachs Group Inc. conference. While Chairman Mark Tucker said last month that the Asian wealth business was one area for potential growth, rivals such as UBS and Credit Suisse Group AG are also beefing up in the region, driving up the cost for talent and clients.

Tough Year

Tucker and Quinn are revisiting a February 2020 strategy reset after it was overtaken by the fallout from the Covid-19 pandemic. The measures included the elimination of 35,000 jobs, about 15% of the total. The new steps will be announced with the company’s full-year financial results on Feb. 23.

The bank’s shares have risen this year, though they have trailed the likes of JPMorgan Chase & Co. and Banco Santander SA. Hopes that HSBC will reinstate its dividend have driven much of the rise after it and other large U.K. banks were told by the British authorities to cease shareholder payouts due to the pandemic.

Along with the financial stress, HSBC executives have had to navigate political conflict over its position in China. Most recently, Quinn and Colin Bell, group head of compliance, were summoned by British lawmakers this month to explain the decision to freeze the accounts of exiled Hong Kong legislator Ted Hui.

Job Moves

As part of the coming shakeup, HSBC is considering moving some of its top executives to Asia. Bloomberg News reported this month that Greg Guyett and Georges Elhedery, co-heads of global banking and markets, could relocate to Hong Kong.

Additionally, Barry O’Byrne, head of global corporate banking, and Nuno Matos, head of wealth and personal banking, could also move from London to Asia, according to people familiar with the matter. If all the moves were to be confirmed it would mean that much of the bank would be run on a day-to-day basis thousands of miles from its London headquarters.

HSBC this month announced the opening of a new office in Guangdong to steer its push into the Greater Bay Area, a Beijing-backed project to create closer links between Hong Kong and several southern mainland Chinese cities, including the tech hub of Shenzhen. The area is home to 72 million people and speaking last month, Tucker said the bank saw “substantial opportunities” in the zone.

Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.