HSBC is making a bet on Asia millionaires
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HSBC Holdings is planning to increase its wealth-management staff in Asia as chief executive officer John Flint bets on growth in the region.
The bank plans to add more than 1,300 positions, split roughly between retail and private banking, by 2022, according to the heads of the two divisions, which between them currently employ just over 32,000 people in the region. The bulk of the hires, some of which could be internal, will be in Hong Kong and Singapore.
The wealth strategy is part of Mr Flint’s plan to grow HSBC by expanding in Asian markets including Greater China and South-east Asia. The CEO, promoted in February, said in June that HSBC will pour as much as US$17 billion by 2020 into expanding the region’s business and improving technology. The bank aims to grow revenue from Asia by at least US$1 billion during the same period.
“We have a real opportunity to do more and that’s to further build on Hong Kong and to materially build what we do today in Singapore,” Kevin Martin, the firm’s Asia-Pacific head of retail banking and wealth management, said in an interview. “Both businesses need to do it in concert,” he said, referring to the retail and private banking units.
THe London-based bank’s plans for wealth management in Asia, which is dominated by global banks such as UBS Group AG, Citigroup Inc and Credit Suisse Group AG, come as regional firms including DBS Group Holdings Ltd. and BOC Hong Kong (Holdings) Ltd are also expanding amid an unprecedented rise in the region’s assets.
HSBC said on Monday that Antonio Simoes, who was head of UK and Europe, will run global private banking from Jan 1. Peter Boyles, who currently runs the group, will retire after 43 years at the company.
“Both businesses need to do it in concert,”
Offshore wealth in Asia, excluding Japan, has been growing at about 10 per cent a year, according to Boston Consulting Group data, faster than the 5 per cent globally. Offshore wealth from China alone amounted to about US$1 trillion this year, the consulting firm estimated.
Hong Kong’s wealth managers expect to double the money they handle over the next five years to about US$2 trillion, the city’s Private Wealth Management Association said in a recent report published with KPMG China, citing the increasing interest of Chinese nationals looking to diversify their holdings.
“The wealth that the Chinese have already offshore is a massive piece of opportunity for us,” said Tan Siew Meng, Asia-Pacific head of global private banking at HSBC.
The expected growth in the industry may exacerbate Hong Kong’s shortage of relationship managers, according to the Private Wealth Management Association’s report. Two-thirds of respondents said a “limited talent pool” was the biggest supply-side constraint.
Mr Martin said the 1,300 staff boost is “not a big scary number” given that his retail bank, including subsidiary Hang Seng Bank Ltd, employs about 31,000 people in the Asia-Pacific region. Staff within the group may transfer to the wealth business, he said. Hiring will be both internal and external, and include relationship managers, product specialists and advisers, Ms Tan said. Her private bank had 1,100 employees in the region at the end of last year.
Questions & Answers
Q.What is HSBC's primary goal in expanding its wealth management operations in Asia?
What is HSBC's primary goal in expanding its wealth management operations in Asia?
HSBC aims to grow revenue from Asia by at least US$1 billion by 2020. This expansion is part of a broader plan to invest US$17 billion into the region's business and technology during the same period.
Q.How many new wealth management roles does HSBC plan to create in Asia, and where will the majority of these be located?
How many new wealth management roles does HSBC plan to create in Asia, and where will the majority of these be located?
HSBC plans to add over 1,300 new positions by 2022, split between retail and private banking. The bulk of these new hires will be in Hong Kong and Singapore.
Q.What is the expected growth rate of offshore wealth in Asia, excluding Japan, and how does this compare to global growth?
What is the expected growth rate of offshore wealth in Asia, excluding Japan, and how does this compare to global growth?
Offshore wealth in Asia, excluding Japan, is growing at about 10 per cent annually. This rate is faster than the global growth rate of 5 per cent, according to Boston Consulting Group data.
Q.Is HSBC concerned about the potential shortage of relationship managers in Hong Kong?
Is HSBC concerned about the potential shortage of relationship managers in Hong Kong?
HSBC does not view the 1,300 staff boost as a significant challenge, noting that its retail bank already employs about 31,000 people. The company plans to hire both internally and externally for these roles.
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