HSBC to target wealth management in latest strategic shift

The bank oversaw just over $361bn of assets on behalf of its wealthiest customers at the end of 2019

Pedestrians walk past a HSBC branch in Singapore. The bank plans to accelerate its expansion across Asia in its imminent strategy refresh. Bloomberg

HSBC’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 Noel Quinn told about 250 top managers that HSBC aims to become one of the world’s biggest wealth managers.

Mr Quinn said 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. A spokeswoman for HSBC declined to comment.

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, the world’s biggest wealth manager, had $2.6 trillion of assets under management.

In 2019, about 65 per cent of the $8.6bn 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 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 are also beefing up in the region, driving up the cost for talent and clients.

Mr Tucker and Mr 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 per cent of the total. The new steps will be announced with the company’s full-year financial results on February 23.

The bank’s shares have risen this year, though they have trailed the likes of JPMorgan Chase and Banco Santander.

Hopes that HSBC will reinstate its dividend have driven much of the rise after it and other large UK banks were told by the British authorities to cease shareholder pay-outs due to the pandemic.