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Hang Seng WM business grows profit 33%

Hong Kong’s Hang Seng Bank reported a 33% increase in income generated by its wealth management business, driven by strong demand for investment products.
Hang Seng WM business grows profit 33%

The bank, a subsidiary of HSBC, saw the total income from its wealth management division rise to HK$8.77bn ($1.12bn) from HK$6.61bn the year before. The business sells retail investment funds, securities and insurance products.

Hang Seng posted a 21% year-on-year growth in fund sales, generating HK$1.77bn in fee income in 2017. The growth was driven by the upturn in investment sentiment, according to the bank. In Hong Kong, the number of high-net-worth clients expanded by 24% year-on-year.

In China, the bank’s joint venture Hang Seng Qianhai Fund Management (HSQF) plans to launch its second mutual fund product in the coming months, the bank announced. The fund, recently approved by the regulators, is designed to capture new opportunities created by policy initiatives and financial liberalisation on the mainland, according to a statement from the bank.

HSQF was set up in July in 2016. It is 70% owned by Hang Seng Bank, while the remaining 30% stake is held by the state-owned Qianhai Financial Holdings. The partnership helps Hang Seng interpret China’s government policies and navigate regulatory issues.

The joint venture now manages one mutual fund which was launched in April 2017. The equity-focused Shanghai-Hong Kong-Shenzhen Emerging Industry Selection Mixed Type Fund allocates at least 55% of its assets to new economy sectors, such as electric cars, biotech and green energy.

HSBC parent

Hang Seng’s parent HSBC also announced annual financial results yesterday. The net operating income of its global wealth management business rose by 18% to $6.22bn in 2017, driven by the development of life insurance products.

In context, HSBC’s total global revenues for the full year 2017 were $51.4bn, up 7%.

The bank said increased investor confidence, notably in Hong Kong, has raised the revenue from sales of mutual funds and retail securities. The sales of mutual funds globally grew by 22%, though the dollar figure was not disclosed.

The bank also did not give a breakdown of results for its Asia business.

At the end of 2017, HSBC Global Asset Management grew its funds under management, year-on-year, by 12.7% to $462bn, while the assets under management in Asia grew by 17% to $172bn.

The bank attributed the increase to favourable market performance and foreign currency movements.

In 2017, net new money from retail and institutional customers was generated by sales of fixed income and multi-asset products in Asia and money market solutions in North America. The increase was partially offset by net outflows in Europe.

The HSBC Asia High Income Bond Fund, which was launched in February in Hong Kong, ranked among the top 10 best-selling new Asia-domiciled funds in 2017, according to Broadridge Financial.

Part of the Mark Allen Group.