HSBC asset sale to LGT will halve countries served by its private bank
HSBC is halving the number of countries its private bank serves after selling a portfolio of Swiss banking assets, the latest bank to narrow its wealth management focus in a bid to improve profitability and cut compliance risk.
HSBC is halving the number of countries its private bank serves after selling a portfolio of Swiss banking assets, the latest bank to narrow its wealth management focus in a bid to improve profitability and cut compliance risk.
HSBC, Europe's biggest bank by market value, said its private bank served customers from about 150 countries but was being reduced to about 70.
Most of that cut will be achieved through a deal to sell US$12.5 billion of its Swiss private banking assets to Liechtenstein's biggest bank LGT Group Foundation.
Wealth management can be an extremely high return business, but a clampdown on tax evasion and tougher compliance rules across banking have put intense scrutiny on the business. Barclays last year withdrew from 130 countries where it offered wealth management, and Credit Suisse also decided to exit or partially pull back from 50 countries.
HSBC chief executive Stuart Gulliver has sold or closed more than 60 businesses in the last three years as it shuts areas that are loss-making or lack scale. He has also said the bank was too complex and needed to be simplified.
The streamlining of the private bank is in line with that wider group strategy, HSBC said.
The assets sold to LGT represent about 3 per cent of HSBC private banking assets under management of about US$382 billion at the end of 2013, and about 15 per cent of the Swiss private bank's assets of about 75 billion Swiss francs (HK$649 billion). HSBC said it remained committed to Switzerland as a key international centre for its global private banking business.
HSBC and LGT said about 70 staff would transfer as part of the deal. HSBC has about 1,400 in its Swiss private bank.
HSBC said the deal with LGT is subject to regulatory and other approvals and is expected to be completed in the last quarter of this year.
