HSBC will hire rapidly in its Asian wealth business in 2022, building on last year’s brisk expansion, and remains open to growing in this area through deals, according to the executive overseeing the bank’s dealings with individual customers.
The London-based bank is jockeying with rivals to win more business from the region’s growing ranks of affluent customers, and is investing billions of dollars to strengthen its position.
“Asia is where we are doubling down our efforts, not only because Asia wealth is growing twice as fast as the rest of the world, but also because we are ‘the bank of Asia,’” said Nuno Matos, the chief executive of HSBC’s wealth and personal banking division.
The unit caters to some 38 million customers worldwide, from holders of regular checking accounts to ultrarich clients with more than $30m to invest. It spans areas such as insurance, wealth management and private banking, plus retail banking businesses like mortgages and credit cards. About one-third of customers are in Asia, Matos said.
In an interview, Matos said the bank hired about 1,200 people in its Asia wealth business last year and was likely to add more or less as many this year. That includes lifting the number of wealth planners at Pinnacle, its branchless onshore wealth business in China, he said, to 1,000 or more from about 700.
The expansion shows HSBC is pushing ahead with its plan, detailed last year, to hire more than 5,000 people, including some 3,000 at Pinnacle, to work with rich clients in the region.
More broadly, HSBC said last year it would invest more than $3.5bn over five years to expand its Asian wealth business, as part of a $6bn plan to sharpen its focus on the region.
Matos said the onshore venture now has some 200,000 registered users of its app, River, which offers market analysis as well as tools such as a family expenses tracker and a retirement calculator. HSBC hopes to convert app users into bank clients by referring them to Pinnacle wealth planners.
HSBC is placing long-term bets on China and Asia against a challenging backdrop. Global markets have been rattled by the war in Ukraine, rapid inflation and a shift toward tighter US monetary policy. Meanwhile, widespread Covid-19 lockdowns in China are weighing on an economy that has already weathered a series of corporate crackdowns.
The World Bank recently cut its forecast for growth in China’s gross domestic product this year to 5%, from 5.4% six months ago, and warned that a tougher scenario could cut that to just 4%. Stock markets in mainland China and Hong Kong have both pulled back this year, after declines in 2021. Weaker markets could dent demand for certain kinds of investment products.
The ranks of Asia’s wealthy are growing rapidly — for example, last year Credit Suisse estimated that by 2025 China would be home to 10.2 million millionaires, 93% more than in 2020. But while HSBC has deep roots in the region, it is far from alone in chasing this growing market.
Citigroup is also hiring thousands of staff, and targeting a big increase in the assets it manages for clients in Asia, while paring back its consumer banking operations. The Swiss sector heavyweight UBS is also intent on capturing growth in Asian wealth, as well as in the US.
Wealth clients in China have increasingly complex demands, said Matos. “We are seeing a shift every year, where customers are now being much more conscious of the need to invest in more sophisticated products. That could be equity, mutual funds, fixed income,” or even alternative assets for high-net-worth clients, he said. And Asian clients are diversifying globally, rather than investing solely in the region, he said.
HSBC has struck a series of deals recently to bolster its offerings in Asia. These include acquiring AXA’s Singapore operations for about $529m and securing approval to take full control of an onshore Chinese life-insurance business.
In India, it has agreed to buy L&T Investment Management for $425m. It could also lift its stake in an Indian insurance affiliate to 49% from 26%, the prospective seller said in February.
“We will always be looking for bolt-on acquisitions, bespoke acquisitions, provided that they deliver value for shareholders, they acquire scale, they acquire capabilities,” Matos said.
Matos worked at Banco Santander before joining HSBC in 2015. He became CEO of the unit in February 2021, and moved to Hong Kong later in the year, as part of a push by HSBC to locate more of its top executives in what HSBC CEO Noel Quinn called “key growth regions.”
Write to Quentin Webb at [email protected]
This article was published by Dow Jones Newswires