Strategy

Clive Bannister Comments on HSBC Private Bank’s Strategy

Contributing Editor, 1 March 2005

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HSBC Private Bank believes that it can be one of the top three, if not the number one, wealth management firms in the world. The bank has se...

HSBC Private Bank believes that it can be one of the top three, if not the number one, wealth management firms in the world. The bank has set out its stall and yesterday it reported a 23 per cent increase ($693 million) in profit before tax in 2004. Assets under management rose by 21 per cent to $178.2 billion and net new money rose by $13.1 billion.

These were all encouraging results, according to the man in charge Clive Bannister, who yesterday spoke to WealthBriefing about the results and the private bank’s future strategy.

“These results confirm our position as one of the top global private banks,” said Mr Bannister. “We have the tenacity and the depth of skills to go forward and achieve even greater results in the future.”

The head of the private bank pointed out that growth was strong in all regions, but particularly in Asia and Europe. In Europe pre-tax profits rose by 26 per cent in 2004. The UK and Switzerland are driving growth in Europe.

“In the UK our major strategy is to open up in regional centres, and we are in the process of launching new offices in three new cities. Next year we plan to open other regional offices and north of the boarder is likely to be part of this strategy.” said Mr Bannister.

A potential weak spot for the bank is the US, where pre-tax profits rose by just 6 per cent in 2004. Mr Bannister said the strategy there was to build on the success of its Wealth & Tax Advisory Service, one of the largest tax advisory firms in the US.

But he also saw further opportunities. Referring to the huge wealth management market in the US, Mr Bannister said: “We are a minnow in an ocean of opportunities…but we are pursuing a one brick at a time strategy and are tightly focused in this market.”

The Asia-Pacific market, excluding Hong Kong, showed a 59 per cent rise in pre-tax profits for the private bank—by far the fastest growing region. Mr Bannister attributed the good results to the underlining strong economic growth in the region, the excellent management skills on Monica Wong—the private bank’s head in the region—and the extensive product range the bank offers its clients.

The private bank is keen to develop links with other parts of the HSBC group, which Mr Bannister said would be a major strategy over the next few years.

Speaking from the private bank’s headquarters in Canary Wharf, London, Mr Bannister did not appear too concerned about the smaller contribution to the group’s profits of the private bank—down to 3.6 per cent in 2004, compared with 3.9 per cent in 2003.

“It is generally felt among the bank’s senior managers that there is a strong halo effect the private bank has on the entire group,” said Mr Bannister.

Nevertheless, he also said Stephen Green, the overall chief executive of the HSBC Group, often quotes the old adage: “the whole is worth more than the sum of all the parts.”

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