By Selena Li
HONG KONG (Reuters) – HSBC plans to accelerate the expansion of its wealth business in China despite economic challenges and is on track to almost double its headcount by next year, its global wealth chief said, while the credit institution continues its pivot strategy in Asia.
The bank, which makes most of its revenue in Asia, also plans to expand its core wealth business in India, where it relaunched private banking services last year, said Wealth and Personal Banking CEO Nuno Matos.
“We are certainly in acceleration mode because we are seeing the confirmation of our expectations when we started our journey to wealth in onshore China,” Matos told Reuters on the sidelines of the HSBC Global Investment Summit in Hong Kong on Tuesday.
HSBC has hired around 1,700 wealth managers in China since 2021 as part of its digital hybrid wealth project Pinnacle, and is on track to bring that to 1,900 by the end of this year and reach a target of 3,000 by 2025, he has declared.
Added to these are the 100 private bankers that HSBC has recruited across China and “a significant number of employees” brought in from Citigroup, which sold its bulk unit in the country to HSBC last year, Matos said.
The bank’s expansion into China comes amid growing concerns about the prospects of the world’s second-largest economy, as Beijing grapples with an unprecedented debt crisis in local municipalities and the real estate sector.
Despite the expansion, HSBC’s wealth and personal banking unit, which accounted for 38% of the bank’s profits last year, posted an operating loss of $90 million in China last year, underscoring the long journey to tie.
“In China, we are investing for the future. It is a market that requires patience and persistence. Many components of our business (wealth and personal banking) in China are already profitable,” Matos said.
In addition to wealth, the business unit’s offerings in China include retail banking, wealth management and insurance.
HSBC is also betting on a robust Indian economy to further grow its wealth assets in the country.
It has hired about 50 relationship managers and investment advisors since relaunching its private banking unit in India last July, Matos said.
“In terms of speed (of business growth), India is really flying right now.”
The bank’s Asian wealth hubs, Hong Kong and Singapore, continue to benefit from the growing number of high-net-worth Chinese individuals investing overseas. Singapore is also benefiting from Middle Eastern clients looking to diversify, she said.
About 40% of the wealth flowing out of the UAE, where the bank launched its onshore private banking business two years ago, went to Asia, Matos added.