HSBC is about to launch a service allowing wealthy clients to pay for their own personal fund managers who invest their cash and are always on call.
A customer willing to invest US$1 million (Dh3.6m) will be able to call on the discretionary portfolio manager as HSBC tries to increase its quality of service and improve its retail brand image in the Gulf.
"Very soon we are going to be launching a discretionary portfolio management service offered to customers, starting in the UAE," said Niall Husbands, the bank's regional head of wealth management. "Rather than buying units in a fund, they will have a segregated mandate so they will have a portfolio in their name that will directly own the underlying investments, equities, fixed income or cash."
The service will first be rolled out in the UAE, then the rest of the Gulf. The retail and wealth division is one of only a few areas of HSBC Middle East in which the bank is investing and looking to increase lending to customers with sound finances.
At the end of March, the bank acquired the onshore banking assets of Lloyds TSB Middle East, taking on about 8,800 retail and high-net-worth customers.
Last month, HSBC Oman also announced a plan to merge with Oman International Bank, a move that would increase HSBC's branch network significantly.
"The discretionary solution is aimed at wealthy customers," said Mr Husbands. "You agree a strategy, you put the funds in a portfolio, and then you have a market specialist from HSBC global asset management, managing that portfolio on a day-to-day basis."
Overall, the Middle East was the only region in the world where the bank shrank its lending in the first quarter, as it increased credit to Asian markets and upped lending to individuals in Europe.
HSBC's charges on bad debts in the Middle East grew to $111m in the first quarter, from $38m in the same period last year.
Francesca McDonagh, HSBC's regional head of retail banking and wealth management, said the increase in bad debts was not attributable to the retail side of the business and that the bank was working on improving its customer service.
"Service is an opportunity to improve," she said.
Ms McDonagh said she had begun implementing a strategy to ensure service, systems and processes in the UAE were consistent with HSBC globally.
She said volatile markets in Europe and weak economic conditions would not hinder the retail bank from lending to customers in the short term.
"In retail banking or wealth management, we have no outlook to change our approach because of what's happening in Europe," she said. "The underlying fundamentals remain positive. The Lloyds deal and intention to merge with OIB in Oman underpin that investment in the region."
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