By Steve Slater
LONDON, June 24 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
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
($1 = 0.8950 Swiss Francs)
(Editing by Chris Vellacott and David Evans)