HSBC Targets Wealth Management in Search of Growth
In its quest to improve its financial position, HSBC is set to target the wealth management niche for future growth. The bank announced last week that it is increasing its focus on the Asian market and believes wealth management in the region can provide a great boost to its bottom line. This comes after a poor performance during the course of the COVID pandemic.
The struggling bank
HSBC layed off 35,000 workers during the COVID pandemic last year. These workers formed 15% of their total workforce. Financial struggles on one side, the bank has also had to deal with problems on the political front. HSBC is the largest international bank in China and faced an inquiry after freezing Ted Hui’s, a Hong Kong legislator in exile, accounts. As it continues growing its business in China, political issues like these are likely to arise in the future as well.
Focus on Asia
The CEO of HSBC, Noel Quinn, while talking to 250 of his top managers at a conference last week, said that the bank was looking to invest at scale in order to explore the opportunities markets in Asia, Middle East, and the UK provide. According to him, these regions provide room for expansion and growth and will be focused on by the bank in its upcoming strategy.
After laying off the 35,000 workers last year, HSBC is now considering moving a part of its top management to Asia. According to Bloomberg, two notable executives might relocate to Hong Kong to better focus on the Asian market. These two executives include Nuno Matos, Wealth and Personal Banking head, and Barry O’Bryne, head of Global Corporate Banking.
The move means most of the bank’s decisions will be made in Hong Kong, even though the bank is headquartered in London. This shows how much value the Asian market provides and how HSBC is clearly shifting its focus to the Asian market.
Earlier this month, HSBC also opened a new office in Guangdong. The purpose of establishing this presence is to improve links to the major mainland cities in southern China. That economic zone has a population of 72 million people (more than the UK) and carries enormous opportunities for the bank according to its chairman, Mark Tucker.
As with all other banks around the world, the COVID-19 pandemic had a negative impact on business. HSBC was one of the banks told to halt dividend payments to its investors. That dividend order has now been removed, which has helped the company’s stock improve its market position.
However, the bank still lags behind other major banks like Banco Santander and JPMorgan Chase, mainly because of its struggling business over the past few years. HSBC intends to improve its position now with a renewed focus on Asia and wealth management in general. It remains to be seen how well HSBC can execute its new strategy for growth.