HSBC Holdings PLC's private banking business is actively pursuing a double-digit growth in revenue and client assets, as it riffs off a sudden rise in Asian wealth, according to the unit’s chief executive.
Chief Executive Antonio Simoes said that HSBC aims to increase its physical presence in China. The world’s second-largest economy is known to be home to almost 13% of all billionaires’ wealth globally.
“The strategy to achieve double-digit asset and revenue growth is working,” said Simoes, who had only recently filled the position in January. “And as part of that, Asia is by far the region that is growing the most.”
The increased economic growth, fast growing wages, and flourishing entrepreneurial ecosystem that makes clients rich faster than in the West, has established Asia as the battleground for global wealth managers.
HSBC’s private banking unit assets increased to 9.4%, or $338 billion from January to September of 2019. Revenue was 4.6% higher than last year’s on the same period, worth $1.4 billion. The unit, which is at 3%, is the smallest contributor to the group revenue.
42% of HSBC’s total private banking assets is in Asia, which establishes it as the largest market. Asia also accounts for the biggest share in the bank’s total revenue.
However, the violent protests and overall unrest in Hong Kong that has been going on for six months has raised concerns of rich clients potentially finding an alternative centre, as the city is one of the two main wealth management hubs in Asia, alongside Singapore.
Chief Executive Simoes said that HSBC in Chinese territory has not been greatly affected.
“Our third-quarter results showed very resilient performance for Hong Kong against the backdrop of what’s happening,” Simoes said. “From a private banking perspective, we continue to have targets for Hong Kong that are very ambitious.”
Simoes said that the bank was sticking to its plan of adding 700 employees to its Asia unit by 2022, as announced last year. Three hundred bankers have been hired so far, according to the Chief Executive.
HSBC’s plans came as interim CEO Noel Quinn reviews the bank’s worldwide businesses as a component in his audition for the role under Chairman Mark Tucker.
“Going forward, we want to be bigger in onshore China and we are looking at how to do that as regulations change,” Simoes said.
“If you take a 10-year view, we will need to be bigger in onshore China.”