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HSBC Singapore on hiring blitz to tap burgeoning Asia wealth
AS HSBC mounts an aggressive push to tap the burgeoning wealth in Asia, HSBC Singapore has targets to double total wealth - including deposits and investments - from the retail and private banking segment over the next five years, said its senior executives.
This comes as the bank globally wants to signal that much of its restructuring is behind it, as it commits US$15-17 billion for spending in technology and growth over the next two years. The bank's Singapore franchise, as one of the core markets cherry-picked by the group, is expected to secure a sizeable part of that investment.
As a testament to the growth optimism, HSBC Singapore also plans to add over 400 retail and private banking customer-facing employees over five years to support these ambitions. This means doubling its headcount in these specific areas.
"The entire bank, globally, is finding its way back to growth," said HSBC's head of global private banking, Southeast Asia, Philip Kunz, in an exclusive interview with The Business Times.
HSBC Singapore's head of retail banking and wealth management, Anurag Mathur, added: "One of the centrepieces of the strategy is to grow Asian wealth as a key component of the business. The whys are underpinned by the demographics."
HSBC Singapore's retail banking and wealth management business targets individuals with US$1-5 million in investible assets. The bank's private banking arm in Singapore, meanwhile, looks at high net worth individuals (HNWIs) with more than US$5 million, and in particular the UHNW segment with US$100 million or more in investible assets.
With Singapore as a entry for access to Asean growth, HSBC plans to dig deeper into its ties with corporate customers in this region. Its current client base translates to more than 5,000 clients - excluding subsidiaries of multi-national corporations - and more than 20,000 small and medium-sized enterprises.
HSBC Singapore is relying on the existing base of commercial clients as these business owners are now seeking expertise to grow their fortunes outside of Singapore, and can benefit from the regional and global footprint of HSBC.
This comes even as the bank has, since 2011, reduced its footprint from 87 countries to 67. Today, Asia now represents about 75 per cent of the group's profits. HSBC has meanwhile set a 2020 target to be the top international bank in financing deals related to the Belt and Road Initiative.
Mr Kunz said alongside these business trends, business customers are also looking at solutions from private banks that extend from constructing an investment portfolio, to holistic advice on passing on the business to the next generation.
Both units can also lean on HSBC's insurance and asset management business to source suitable products targeting the HNWI segment.
Meanwhile, estimates cited by HSBC showed that Singapore remains the preferred location for South-east Asian HNWIs to park their offshore wealth.
HSBC Singapore will also look to grow its business by tapping on Chinese offshore wealth, with Singapore still ranked among the top three destinations for offshore wealth - not just for Chinese HNWIs, but Indian ones, too.
Mr Kunz observed that working through offshore wealth centres such as Singapore continues to be attractive as the country has been open to access to global capital markets.
Without open regulation in other markets, it may be difficult to sustain an onshore private wealth business despite the huge opportunity in large markets in Asia with surging wealth.
Mr Kunz acknowledged the "hugely competitive" environment in the private banking space in Asia, but said the returns remain compelling.
He said the cost-to-income ratio has been low, giving the bank headroom to grow the business further.
HSBC is ranked among pure private banking players as fourth in Asia, Mr Kunz said. "We want to make sure that we stay there, and we don't slide back. It is an ambition to move that to the top. I'm very comfortable with the starting position."
HSBC Singapore will come up against the "upward spiral" of salaries of private bankers, as Mr Kunz put it, but both bankers told BT that the bank has an incentive structure for relationship managers that tries to ensure they stay with clients over the long term.
Mr Mathur said: "We are very competitive, but it's not a get-rich-quick scheme."
He added: "It's driven by the tone from the top. It's now hard wired in everything we do... and very much in the daily rhythm of how an RM operates. It's also, dare I say, what gives the group the confidence to go after aggressive growth."
Even as HSBC Singapore aims to grow its wealth segment, Mr Mathur makes clear that the bank's latest digital investment will also allow the Singapore franchise to continue working with the broad-base retail segment, rather than making it less of a priority.
"With digital technology and changing customer behaviours, it's actually more economical to serve a lower wealth level than it was five years ago. We are looking to grow with the customer base."