The HSBC CEO intends to keep the private banking arm of the bank as a separate, standalone business, contrasting with the approach of Barclays, which has folded its wealth arm into another unit, a report said.

HSBC chief executive Stuart Gulliver intends to keep the private banking arm of the UK/Hong Kong-listed bank as a separate, standalone business, contrasting with the approach of Barclays, which has folded its wealth arm into another unit, the Financial Times reported.

In May, UK-listed Barclays reduced its business lines to four divisions, with the wealth and investment management business forming part of the Personal and Corporate Banking arm. When the bank reported results a few days ago, there were no longer any figures on the wealth business, such as assets under management, earnings, inflows or staff numbers. It is understood that one reason why the wealth business’s head, Peter Horrell, is stepping down is because of this structural change; a number of other Barclays figures in the wealth business have left. (To see an analysis of the issue on this publication, click here.)

HSBC’s Gulliver, who took the role years ago, said the private banking arm needed to be run as a “discrete business” to retain talent, the FT report said, citing a response to an analyst’s question.
Gulliver said: “I think it is important to the retention of top-quality private bankers that we don’t subsume [private banking] within a retail banking business, because clearly the nature of the client base and therefore by definition the nature of the staff is quite different. There is logic in having it managed as a discrete business, because the business requires that separate oxygen, that separate culture.”

The CEO denied that the reduction in scale, and HSBC’s recent decision to sell a chunk of its Swiss private banking assets to Liechtenstein’s LGT Group, indicated that its private bank, which accounts for 3 per cent of HSBC’s profits, is not a priority business line.

“I see the private bank as being a core part of the value proposition of HSBC. I am confident that we can rebuild the private banking business back to one that may exert $1 billion to $1.5 billion [of profits] per annum,” he is quoted by the newspaper as saying.