By Steve Slater
LONDON, June 24 (Reuters) - 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 that was being reduced to about 70.
Most of that cut will be achieved through a deal agreed on Tuesday to sell $12.5 billion of its Swiss private banking assets to Liechtenstein's biggest bank LGT Group Foundation .
Those assets were held by clients in dozens of countries, including in central and eastern Europe, and some countries in west Europe, Africa and in Latin America that HSBC has deemed as not strategically important.
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 percent of HSBC private banking assets under management of about $382 billion at the end of 2013, and about 15 percent of the Swiss private bank's assets of around 75 billion Swiss francs ($83.8 billion).
HSBC said it remained committed to Switzerland as a key international centre for its global private banking business.
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 last year.
HSBC and LGT said about 70 staff would transfer as part of the deal. HSBC has about 1,400 in its Swiss private bank.
It said the deal is subject to regulatory and other approvals and is expected to complete in the last quarter of this year.
($1 = 0.8950 Swiss Francs) (Editing by Chris Vellacott and David Evans)