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, HSBC chief executive officer Noel Quinn told about 250 top managers that the firm 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 UK 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.
RELATIVE MINNOW
While HSBC is the biggest international bank in China and the largest lender in Europe, it is a relative minnow in the business of managing assets for the world’s wealthiest investors. It oversaw just over US$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 US$2.6 trillion of assets under management.
In 2019, about 65 percent of the US$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.
Chairman Mark Tucker and Quinn are revisiting a strategy reset from February last year after it was overtaken by the fallout from the COVID-19 pandemic. The measures included the elimination of 35,000 jobs, about 15 percent of the total. The new steps are to be announced with the company’s full-year financial results on Feb. 23.
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 (許智?).
EXECUTIVE PUSH
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.
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