HSBC plans to build a private client strategy in Asia around the region’s expanding number of very wealthy Chinese, according to a new strategy published on 11 June.
Citing figures showing that high net worth assets will double by 2025, HSBC estimates household income will more than double in the region. By 2025 HNW wealth will reach $42trn as average household income increases 2.3 times to $32,600.
HSBC expects the middle class population in Asia to increase 2.5 times to 3.5bn individuals.
In response HSBC said it wanted to grow from its wealth revenues to $6bn by 2020 from $5.1bn in 2017.
HSBC’s wealth businesses in Asia includes its private bank, retail bank wealth, insurance and asset management.
Segments
The largest chunk of the growth is expected to come from its private and retail banking operations through an increase in the share of the ultra high net worth (UHNW) segment of the market in China through its businesses in Hong Kong and Singapore.
The bank wants to bring in new clients aggressively though its Singapore hub, where it will also serve offshore Chinese. It expects to add more than $400m in revenue from the UHNW segment by 2020.
In insurance, HSBC said it was “exploring opportunities” in mainland China, developing its product range and looking to add brokers. A further $400m is estimated to flow from these initiatives.
The remaining $100m is set to come from asset management through existing channels and a predicted growth in alternatives and sustainable investing.
Speaking in Hong Kong, group chief executive John Flint said of HSBC’s overall strategy: “After a period of restructuring, it is now time for HSBC to get back into growth mode. The existing strategy is working and provides a strong platform for future profitable growth.
“In the next phase of our strategy we will accelerate growth in areas of strength, in particular in Asia and from our international network. We will leverage our size and strength to embrace new technologies, investing $15-17bn primarily in growth and technology.”
